Telegram

Financial Research

First Word

First Word

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Week 2 of 1Q2021 earnings + better COVID-19 progress + cash coming off sidelines... Updating Granny Shots... Over the weekend (and Friday), there were several notable COVID-19 developments, all entirely positive - Israel lifting outdoor mask mandates as cases have plunged to near obliteration (thanks ES for heads up)- Dr. Fauci in a CNN interview expects the J&J vaccines to resume by Friday, with labeling- CDC reported breakthroughs (vaccinated but get COVID-19) a mere 5,814 cases of 75 million vaccinated, or 0.0078% of vaccinated. So 3 of the major items over the weekend were all positive and support the US moving towards a full re-opening by mid-June. Of these developments, to me, Israel's announcement is the most important. Source: /israel-news/as-outdoor-mask-mandate-ends-jubilant-israelis-adjust-to-new-set-of-covid-rules-1.9723288 We have tracked Israel's case progress closely, as our clients know, but the rapid progress is worth reviewing: - In 3 months, Israel's vaccine penetration rose 26% to 62% - In 3 months, Israel's cases (per 1mm) fell 97% from 952 to 26 - 26 cases per 1mm is USA equivalent of 8,500 cases per day (vs ~65,000 now) The chart below show three key milestones that are associated with case plunges - 26% penetration, daily cases peaked - 40% penetration, massive leg down in cases, -53% - 58% penetration, massive leg down in cases, -93% Interestingly, while vaccinations rose steadily, daily cases went through plunges and plateaus. While I don't know the exact reason for this, it likely reflects the combination of: delays in efficacy, offset further by citizen mobility/dropping guard. - nevertheless, Israel's cases have plunged to near obliteration USA on cusp of 40% level that presaged 53% plunge in Israel cases... Our data science team, led by tireless Ken, overlaid Israel and USA vaccine penetration and COVID-19 cases (per 1mm). And as you can see, the US is on the cusp of that 40% level: - USA vaccine penetration is set to reach 40% within a week - Israel saw daily cases take a second leg down after reaching 40% So naturally, we are watching if this analog plays out in the USA. But 40% could be an important level to watch. And if so, USA cases could dip meaningfully once that 40% level is crossed. In simplistic terms, we think the 7D delta in daily cases might soon make a drastic plunge as indicated below. Daily cases have been flatlining recently. Some of this is the surge seen in the Midwest (MI, MN, etc) but also the Northeast (NY, CT, etc). And while variants + Spring Break could explain this, the pattern in Israel suggests that increasing vaccine penetration leads to a new threshold that leads to a plunge. Daily cases are starting to rollover again, as you can see below on the chart below, which is only for the past 6 weeks. As you can see, of the last 5 days, each of those saw 5 consecutive declines. And daily cases on Sunday came in at 41,917, which is down from 47,042 last Sunday. A client of ours in Boston (thanks MF) queried us about breakthrough infections which is defined as COVID-19 infections from those fully vaccinated. The CDC released a report late last week on this topic: - of the 75 million fully vaccinated Americans (4/13) - 5,814 breakthroughs have been reported - this is 0.0078%, or 78 infections per 1 million fully vaccinated That is an astonishingly low rate. And while it is only a snapshot, it does suggest that the 90% effectiveness of the vaccines of Moderna and Pfizer might be accurate. Source: /vaccines/covid-19/health-departments/breakthrough-cases. html And it is encouraging to see J&J vaccine come back online. As you know, financial markets pulled a fire ready aim a few weeks ago, stemming from this vaccine pause. Source: /2021/04/18/politics/fauci-jj-vaccine-friday/index. html STRATEGY: Market color --> week 2 of 1Q2021 earnings + better COVID-19 progress + cash coming off sidelinesEquities have continued post steady gains, and the S&P 500 is up ~6% month to date, bringing its total gain to ~12% this year. And there are still two weeks left of the month. But a few things have surprised us this month: - In the past two weeks, leadership has come from large caps and defensive/ growth - Part of this is explained by the MI and Midwest COVID surge - Part of this is the J&J vaccine pause But we think the movement of cash off the sidelines explains this. - In past two weeks, $45 billion of cash has come off sidelines - Institutional investors, mostly HF, $30 billion in last two weeks, the largest since Dec - HF tend to favor large caps and FANG - Hence, outperformance of FANG/Growth STRATEGY: Updating Granny Shots --> +9 additions, -13 deletions, -4 net = 28 REVISED Granny Shots (*)We updated our Granny shots list on April 9th. We rebalance Granny Shots every three months, and this is the first rebalance of 2021. Granny Shots has continued to lead to relative stability and steady market outperformance: - 2021 YTD outperformance +547bp- 2020 outperformance +3,015bp- 2019 outperformance +879bp   9 Additions:Health Care: $BIIB, $GILD, $REGNConsumer Staples: $MOUtilities: $EIX, $DTechnology: $QRVO, $SWKSEnergy: $PSX 13 Deletions:Technology: $INTC, $KLAC, $AMAT, $LRCX, $HPQConsumer Discretionary: $TGT, $BBYComm. Services: $ATVIEnergy: $XOM, $VLOFinancials: $GL, $RFIndustrials: $GE The revised list of Granny Shots is below. And we marked the additions and deletions, so you can see the changes to the list, both before and after. (*) Please note that the stocks on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 41,917, -5,125vs 7D ago... 7D delta has been negative in the past five days... _____________________________ Current Trends -- COVID-19 cases:- Daily cases 41,917 vs 47,042 7D ago, down -5,125- 7D positivity rate 5.3% vs 5.1% 7D ago- Hospitalized patients 40,728 up +4.0% vs 7D ago- Daily deaths 708, down -1.1% vs 7D ago_____________________________ - The latest COVID-19 daily cases came in at 41,917, down -5,125 vs 7D ago. - After surging to ~16k on last Tuesday, 7D delta in daily cases has turned negative in the past five days. Especially in the past three days, the 7D delta has accelerated to the downside. This is a good sign and 7D delta in daily cases might soon make an even more drastic plunge. - As we wrote before, at this stage of pandemic, as long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments 7D delta in daily cases has turned negative in the past five days... After surging to ~16k on last Tuesday, 7D delta in daily cases has turned negative in the past five days. Especially in the past three days, the 7D delta has accelerated to the downside. This is a good sign and 7D delta in daily cases might soon make an even more drastic plunge. Source: Fundstrat and state health departments US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments POINT 2: VACCINE: 49 states near ~60% infected + vaccinated... 1 in 4 Americans have been fully vaccinated... _____________________________ Current Trends -- Vaccinations: Vaccinations ramping steadily - avg 3.2 million this past week vs 3.1 million last week - overall, 25.2% fully vaccinated, 39.3% 1-dose+ received _____________________________ Vaccination frontier update --> almost all states now near or above 60% combined penetration (vaccines + infections) Below we sorted the states by the combined penetration (vaccinations + infections). As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity. That is, the combined value of infections + vaccinations as % population > 60%. - Currently, all states except OR and HI (see below) are basically all at this level - SD, ND and RI are now above 90% combined penetration (vaccines + infections) - So slowly, the US is getting to that threshold of presumable herd immunity Collectively, these 49 states represent about 97.3% of the US population. In fact, 77.5% of US states (based on state population) have seen combined infection and vaccination >70% and 29.0% of US states have seen combined infection and vaccination >80%. As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. There were a total of 3,521,144 doses administered on Sunday, slightly down from 7D ago. Overall, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). ~73.6% of the US has seen 1-dose penetration >35%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 20%/25%/30% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 93.4% of US states have seen 20% of their residents fully vaccinated. However, when looking at the percentage of the US with at least 25% of its residents fully vaccinated, this figure is 59.0%. And only 3.1% of US (by state population) have seen 30% of its residents fully vaccinated. - While 96.6% of US states have seen vaccine penetration >30%, 73.6% of them have seen 1 dose penetration >35% and 48.3% of them have seen 1 dose penetration > 40%. - 93.4% of the US has at least 20% of its residents fully vaccinated, However, only 59.0% of US has fully vaccinated >25% - This is still a small figure but this figure is rising sharply now. This is the state by state data below, showing information for states with one dose and for those with two doses. The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days - this means 50 vaccines dosed for every 1 confirmed case This figure is rising nicely and likely surges in the coming weeks In total, about 130 million Americans have received at least 1 dose of a vaccine. This is a good pace and as we noted previously, implies 50% of the population by May. POINT 3:Tracking un-restricted and restriction-lifted states We are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates. Keep in mind, easing/lifting restrictions can take multiple forms: - easing indoor capacity - opening theaters, gyms, salons, saloons - eliminating capacity restrictions - eliminating mask mandates So there is a spectrum of approaches. Our team is listing 3 tiers of states and these are shown below. - states that eased in 2020: AK, OK, MO, FL, TN - states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD - states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1: States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states - that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions. The dates are indicated on each chart. The cases trends in these states have been mostly positive, with perhaps the exception of NY state: - NY state case levels seem awfully stubborn at these high levels - weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

  • First Word
Nov 19, 2020

COVID-19 UPDATE: Hmmm... looking more like cases could rolling over in TX, IL and WI...10 reasons S&P 500 P/E expands into YE --> thus, raising YE Target to 3,800 (vs 3,525 prior).

Click HERE to access the FSInsight COVID-19 Daily Chartbook. _________________________________ REGISTER NOW: Exclusive Virtual Conference on Post Election Roundup and Market Strategy TODAY (11/19) at 3 PM ET... Please join us for an exclusive virtual conference as the leading strategists at FSInisght provide their insights into where the markets are headed and how to position your portfolio in a post-election world. Details and SpecificsDate: Thursday, November 19th, 2020Time: 3:00PM - 6:00PM Eastern Time Link -->  Reserve your seat via this link Should you have any questions, please do not hesitate to leave us a message or email us at inquiry@fsinsight. com._________________________________ STRATEGY: Stocks are still a good risk/reward into YE, as P/E has tailwindsWe do not want to be jumping the gun but it does look more and more like COVID-19 wave 3 could be slowing.  Take a look at the chart below:- the 7D delta in daily cases has slowed markedly from >43,000 to <20,000- and daily cases in TX, IL and WI look to be rolling over (see Point #2)- is wave 3 peaking in the next few weeks?- this is way ahead of our base case of flu season lasting until mid-FebCOVID-19 is unpredictable.  So daily cases might be slowing in wave 3 states, but it could erupt in the Northeast.  So it might be more accurate to say daily cases seem to be rolling over in TX, WI, IL and leave it at that.  We wrote about El Paso and TX yesterday.  But it seems like it is more states now. Source: COVID-19 Tracking and Fundstrat  Given the fierce move by equities in the past few weeks, it is not entirely surprising to see stocks consolidate over the last few days.  And not surprisingly, there are more than a few who believe markets have become overly exuberant.  To an extent, we understand this, as there has been both a sizable move in markets coupled with a sizable rotation into epicenter stocks. That said, we see tailwinds for P/E into year-end, and while upside to earnings revisions is muted for now (we are done with 3Q2020 EPS), we believe risk premia can fall = P/E expansion.  Below are 10 reasons we see this: 1.  COVID-19 vaccine and therapeutics take “worst case” off table. 2.  Policymakers are pursuing soft-lockdowns, not killing recovery3.  Pent-up demand in US, look at output gap4.  China seeing massive explosive economic recovery5.  Fiscal stimulus coming6.  Investors are cautiously positioned, with little conviction7.  $4.5T cash on sidelines8.  If VIX breaks below 20, double-risk on signal9.  Santa Claus rally10. Fed dovish We see S&P 500 reaching 3,800 by year-end (vs 3.525 prior) as P/E expands by 1.4X to 19.7XWith tailwinds for P/E expansion, we see 2021 P/E rising to 19.7X from 18.3X, which would lead to S&P 500 3,800 (based on EPS of $193).  This, we are revising our YE target from 3,525 (which we raised on 8/13) and represents about 6.5% upside.- this is about the magnitude of a typical Santa Claus rally- so we are saying markets see their typical seasonal gains. Source: FundstratS&P 500 P/E of 19.7X is the same as High-yield implied P/E today... so it is not demandingFrom a valuation perspective, the target P/E of 19.7X is the same as the high-yield implied P/E (inverse of yield to worst) of 20.6X.   - in fact, it is a discount- if S&P 500 traded at 20.6X, the S&P 500 would be 3,976 Epicenter stocks rally still weaker than the post-Wave 1 rally... We have written multiple commentaries about the tailwinds for epicenter stocks, and in particular, how they are the most leveraged to both:- vaccine/therapeutics --> demand recovery- economic recovery --> operating leverage via cost cuttingThus, we see the best risk/reward in the epicenter.  And unlike earlier in 2020, there is much greater visibility and tangibility to a vaccine and cure for COVID-19.  Thus, the ability for markets to look beyond contemporaneous cases should be much higher.  As shown below, post-Wave 1, Epicenter stocks rallied 1,900bp relative to the S&P 500.  And the rally was weaker post-Wave 2.- So far, Epicenter has outperformed by 1,420bp.  - This is a fraction of the 7,000bp of YTD outperformance of Growth- Thus, we see substantial upside for epicenter stocks. Source: Fundstrat ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Sluymer (Technicals)- Biden vs Trump  -->   based on correlation to either candidate odds Granny Shots:Full stock list here --> Click here Trifecta Epicenter:Full stock list here --> Click here Biden White House vs. Trump White House:Full stock list here --> Click here POINT 1: Daily cases 160,466, +19,492 vs 7D ago -- the lowest 7D delta in two weeksThe latest COVID-19 daily cases came in at 160,466, up +19,492 vs 7D ago. Wave 3 is still surging.- But oddly, are cases starting to decelerate on a rate of change basis?- maybe Source: COVID-19 Tracking Project  and Fundstrat7D delta at 19,492 is the lowest in nearly 3 weeks... Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average.- Daily cases are rising vs 7D ago,- It had been rising at >40,000 7D delta- But the pace slowed to <20,000 on Wednesday Source: COVID-19 Tracking and Fundstrat   Source: COVID-19 Tracking and Fundstrat   Source: COVID-19 Tracking and FundstratPOINT 2: If Wave 3 is peaking, early signs in WI, IL and TXYesterday, we wrote about how it looks like parts of Texas were seeing a peak in cases.  And below are the major states involved by their respective waves.  If wave 3 is peaking, we believe it is potentially starting in 3 states:- IL --> seems rolling over- TX --> we wrote yesterday about El Paso- WI --> squint... looks like it is rolling over Source: COVID-19 Tracking Project and FundstratThis is the chart showing daily cases per 1mm in the 6 largest counties in Texas.  And El Paso stands out because it looks like cases are finally rolling over. Source: Johns Hopkins and FundstratAgain, looking at Illinois, it does look like this surge associated with Wave 3 could be plateauing... that is a good sign. Source: Johns Hopkins and Fundstrat And again, I might say that Wisconsin also looks like daily cases are starting to roll over... Source: Johns Hopkins and Fundstrat  POINT 3: Age 60+ is now the largest share of new cases, a bad sign for future mortalityThe CDC provides data on demographic trends in COVID-19. The data is somewhat lagged, due to reported delays and the latest update is as of 11/3/2020, or about two weeks ago.  But the extracted data, particularly around the share of cases, is still relevant.  Below shows the share of cases  (trailing 30D) based on age groups.  This is important because we know of the sizable variances in mortality risk (case fatality rate) between age groups:- Wave 1, ~35% of cases were age 60+ which explains the extremely high mortality rates- Wave 2, the plurality of cases were age 20-29- Wave 3, so far, age 60+ is now the largest share of cases at ~21%This wave is underway, but this also suggests that death rates could exceed that of Wave 2, simply because of the higher share of older Americans. source:  chart below shows the case fatality rate by age, based on data from Our World in Data.  And as shown, there is a sharp rise in mortality based on age. the US specifically, Statista has this data, collected from the CDC and also shows considerably higher mortality for older Americans.- in round numbers, if wave 2 was primarily 20-29, the mortality rate (case fatality rate) was 0.1% but age 60+, this jumps to 2.7% or higher- thus, mortality risk remains high unless the standard of the case has improved /chart/21173/hospitalization-icu-admission-and-fatality-rates-for-reported-coronavirus-cases/RANDOM: Chart shows Wave 3 surge is similar to US corn production -- someone called it cornvirusI wanted to share this tweet from @EthicalSkeptic.  This account often comments on COVID-19 with sometimes interesting facets of the pandemic.  But this tweet below caught my eye.- @ethicalskeptic points out that corn production in the US looks similar to wave 3 of COVID-19- I especially found cornvirus to be funny Source: twitter. comThe two images below make it clearer.  I have no idea why these two charts look so similar.  If you have a view, please let me know Source: twitter. com

COVID-19 UPDATE: Israel daily cases (per 1mm) now 26 vs 952 (Jan). ND and SD could see "obliteration" by June. Oil prices key to direction of Epicenter trade...

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Oil prices key to direction of Epicenter trade... We want to revisit the progress of Israel in its battle with COVID-19.  That nation now has vaccinated 62% of its population.  And even with mutations in Israel, they have seen a drastic reduction in COVID-19 cases:- latest 7D avg is a mere 26 cases per 1mm residents- it was 952 per 1mm on 1/18/2021, right before cases apexed with 26% vaccinated- as we said before, COVID-19 looks to have been largely obliterated from IsraelThe takeaway, for me, is that Israel's experience does strongly argue support for the effectiveness of vaccines.  That nation solely relied upon Pfizer for its vaccinations. ... North Dakota and South Dakota better daily cases per 1mm vs Israel at this same point and could be obliterated by JuneTireless Ken and his team overlaid Israel's case results compared to North and South Dakota.  Those two states have among the highest vaccination rates in the US and also the highest overall combined infections + vaccinations.  And as our clients know, we have looked to ND and SD as templates for the rest of the US.- SD has 42% vaccine penetration- ND has 37%- SD daily cases are 227 per 1mm, while Israel was 803 at same vaccine point- ND has 196 per 1mm, well below Israel's 760 at the same pointAs the overlay shows, ND and SD could essentially be at zero cases by June 2021. The lag between penetration of vaccines and cases falling is due to a few factors including the fact that vaccines take time to become effective.  And the broader fact, a lot of the population is still exposed and vulnerable. McKinsey estimates that 80-90% of population needs to be vaccinated, but Israel results argue otherwiseAccording to analysis by McKinsey, with the assumption of more transmissible variants, and the associated decreased effectiveness of the vaccines, they estimate the 80%-90% of the population >age 12 needs to be vaccinated. And as their survey shows, there might be a practical challenge to this:- in their March 2021 survey (n=2,724 respondents)- 85% are in the probable vaccine, which is 5% short- 15% said they are unlikely to get vaccinated- thus, 1/3 of the unlikely need to change their mindOf course, all of this is purely theoretical, in the sense that McKinsey cannot look to precedent COVID-19 pandemics to be assured to their analysis accuracy. STRATEGY: Epicenter stocks endured a month-long sell-off, but oil is arguing for an upside breakout aheadOver the past month, Epicenter stocks have underperformed the broader market, evident in the chart below. Economic momentum remains strong and the increase in EPS estimates steadily over the past few weeks shows the Street is still in the process of raising their forecast and outlook. But there are a few reasons, in the midst of this beat and raise environment that Epicenter aka Cyclicals are not rising:- Good news baked in, and thus, Growth stocks will leadcounter: Epicenter/Cyclicals are projected to have 2022 EBIT >50% to 100% above 2019 levels, but stocks are near 2019 levels- Interest rates falling, so Growth stocks leadcounter: interest rates are falling in part to crowded positioning for higher rate (aka buy the rumor, sell the news) but higher growth = higher rates- Cyclicals are just rentals and Growth stocks are the only real equitiescounter: this is very consensus thinking, foremost, but more importantly, cyclicals are already showing substantial operating leverageBut perhaps the most important thing to consider is that Cyclicals have the capacity for positive surprise.  To me, it seems like most investors are more comfortable buying Growth/FANG and find them attractive after their recent pullback.  So, again, anecdotally, consensus is still overweight Growth, and underweight Epicenter. Source: Fundstrat and BloombergOil prices in next few months might be key to direction of Epicenter trade... But I might have a simpler framework.  In many ways, the path of oil could be a key determinant to the leadership of markets over the next few months.  Think of it this way:- WTI is currently $63- if oil rises to $70-$80 by Summer, what groups would lead?- we know there is a tight linkage between oil and Energy stocks (ETFs: XLE and OIH, as proxy)- rising oil likely to be viewed as reflationary for markets- Energy is one of the leading Epicenter sectorsHence, if oil price strengthens meaningfully above $63, we expect investors to rotate into Cyclicals aka Epicenter.... Epicenter stocks stalled when oil prices consolidatedTake a look below and you can actually see this linkage at work. In fact, I might even suggest there is shocking clarity on this linkage:- WTI oil prices peaked $68 on 3/8/2021 and fell to $59 by April 12th- these dates literally align with the peak and trough of Epicenter stocksOver the past two days, WTI has risen from $59 to $63.  And this has coincided with the recent upturn in Epicenter stocks.  So, as strange as this sounds, the price of Oil might be a leading/contemporaneous yardstick for the Epicenter trade. - if this is true, the price of Oil in the next few months is key Source: Fundstrat and BloombergOil fundamentals are forecasted to strengthen, and consensus not expecting oil to rise strongly into SummerThe oil team at Cornerstone Macro (CSM) published a recent report, noting the significantly more bullish outlook from the IEA.  Cornerstone Macro and Goldman Sachs are one of the few macro sell-ide firms bullish on oil prices.  Goldman believes we are in an oil supercycle and WTI prices could reach $80 this Summer. Source: Cornerstone MacroWithin CSM's report, the analysts have a great chart on US petroleum demand: comparing 2021 to the corresponding week in 2019.- Jet fuel demand is already above 2019 levels for the same week- Similarly propane (not surprised, given stay at home)- But most notably, look at total products demand and that looks set to exceed 2019 levels in coming weeks.  In fact, CSM believes the realized demand upside will be sometime this Summer.  In other words, in coming weeks, factors support a strengthening of demand, which in turn, should drive higher prices. If oil strengthens to $80 this Summer, XLE should be $71, or 45% upside... The linkage between WTI and XLE is very close.  In fact, they have moved in tandem.  The only divergence is the last two days, but this is likely a short term divergence, as you can see these divergences have not persisted.- if WTI trades to $80- this implies the price ratio XLE/SPY (energy vs S&P 500) should rise to 0.17- SPY is $417, which implies $71 for XLE- XLE is $49, or 45% upsideIn other words, if the WTI prices do indeed strengthen, we could see a significant rise in Energy equities.  This would add to their current ~30% gains YTD, or take total gains to ~80%.  In other words, Energy seems to be a very good buy here. ... Bigger picture is the Energy might be starting a new bull market... The bigger fractal (zooming out) is that Energy stocks might be finally ending the 12-year bear market in place since 2008.  We have labelled the comparative bull and bear market cycles for Energy stocks since 1933 (~90 years):- Bear markets last an average of 10 years- Bull markets last an average of 9 yearsThis current bear market is the worst ever for Energy.  In fact, in our 2021 Outlook, we noted one had to go back to whale oil days to find a worst stretch of time for Energy stocks.  - Energy stocks normally rebounded after touching the historical inflection (price ratio)- In 2020, the pandemic cause Energy stocks to massively undershoot. We have written about how there appears to be a significant improvement in the supply/demand dynamics of Energy.  The combination of White House restricting the sector and capital scarcity are contributing to supply constraints.  While demand should recover strongly (see above).- moreover, Energy companies are trying to become carbon neutral and ESG friendly- the sector is also underowned given its small index weightBut if Energy is indeed bottoming longer term, the 322% relative outperformance over 9 years (historical average) implies:- CAGR of 30% per year outperformance vs S&P 500- pretty substantial upside STRATEGY: Updating our Power Trifecta, adding net 10 stocks, now Power Trifecta 35 (*)We are updating our Power Trifecta list. In this rebalance, 3 stocks are deleted and 13 stocks are added. Thus, the total number of stocks has risen by 10 to 35. This makes sense given the recent pullback in the Epicenter names (more stocks are attractive). 3 Deletions:$PBCT, $NVT, $VNO 13 Additions:$AZO, $HOG, $GRMN, $MGM, $WH, $GPS, $LB, $VIRT, $AGCO, $OC, $UBER. $EXP, $NUE 35 Power Trifecta Stocks Ideas:Consumer Discretionary:$AZO, $HOG, $GRMN, $RL, $MGM, $NCLH, $RCL, $WH, $GPS, $LB Financials:$NYCB, $VIRT Industrials:$AGCO, $OC, $DAL, $KEX, $UBER Energy:$XOM, $HP, $NOV, $SLB, $COP, $EOG, $MRO, $MUR, $HFC, $PSX Materials:$EXP, $NUE Real Estate:$BXP, $HIW, $JBGS, $UDR, $KIM, $WRI Source: Fundstrat, Bloomberg (*) the 35 Power Epicenter Trifecta stock ideas are the subset of the original 108 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 108 Epicenter Trifecta stock ideas, please click here ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 68,922, -4,985 vs 7D ago... 7D delta has been negative in the past two days..._____________________________Current Trends -- COVID-19 cases: - Daily cases    68,922 vs 73,907 7D ago, down -4,985- 7D positivity rate   5.5% vs 4.8% 7D ago- Hospitalized patients   40,9993  up +2.7% vs 7D ago- Daily deaths    714,  down -1.1% vs 7D ago_____________________________- The latest COVID-19 daily cases came in at 68,922, down -4,985 vs 7D ago.  - After surging to ~16k on Tuesday, 7D delta in daily cases has turned negative in the past two days. As far as we know, this is not likely a result of data distortion or underreported test results. Hence, if this persists, we could see the case trend resumes its downtrend.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments7D delta in daily cases has turned negative in the past two days... After surging to ~16k on Tuesday, 7D delta in daily cases has turned negative in the past two days. As far as we know, this is not likely a result of data distortion or underreported test results. Hence, if this persists, we could see the case trend resumes its downtrend.   Source: Fundstrat and state health departments   US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments  Source: Fundstrat and state health departments POINT 2: VACCINE: 49 states near ~60% infected + vaccinated..._____________________________Current Trends -- Vaccinations: Vaccinations ramping steadily- avg 3.4 million this past week vs 3.0 million last week- overall, 23.5% fully vaccinated, 37.6% 1-dose+ received_____________________________Vaccination frontier update --> almost all states now near or above 60% combined penetration (vaccines + infections)Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity.  That is, the combined value of infections + vaccinations as % population > 60%.- Currently, all states except OR and HI (see below) are basically all at this level- SD, ND and RI are now above 90% combined penetration (vaccines + infections)- So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 49 states represent about 97.3% of the US population. In fact, 72.7% of US states (based on state population) have seen combined infection and vaccination >70% and 25.2% of US states have seen combined infection and vaccination >80%.  As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 3,508,399 doses administered on Thursday, up 3.5% from 7D ago. Overall, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). In fact, the vaccination path (measured by 7D average to eliminate seasonality) just achieved its all time high recently. On average, ~3.4 million doses were administered on each day in the past 7 days. Source: CDC and Fundstrat  ~72.7% of the US has seen 1-dose penetration >35%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 20%/25%/30% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 91.3% of US states have seen 20% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 25% of its residents fully vaccinated, this figure is 25.6%. And currently 4 states, 1.6% of US by state population, have seen 30% of its residents fully vaccinated.- While 96.6% of US states have seen vaccine penetration >30%, 72.7% of them have seen 1 dose penetration >35% and 39.3% of them have seen 1 dose penetration > 40%.- 91.3% of the US has at least 20% of its residents fully vaccinated, However, only 25.6% of US has fully vaccinated >25%- This is still a small figure but this figure is rising sharply now. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days- this means 50 vaccines dosed for every 1 confirmed caseThis figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 125 million Americans have received at least 1 dose of a vaccine.  This is a good pace and as we noted previously, implies 50% of the population by May.   Source: CDC and Fundstrat POINT 3: Tracking un-restricted and restriction-lifted statesWe are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates.  Keep in mind, easing/lifting restrictions can take multiple forms:- easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandatesSo there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1:  States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states- that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions.  The dates are indicated on each chart.  The cases trends in these states have been mostly positive, with perhaps the exception of NY state:- NY state case levels seem awfully stubborn at these high levels- weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: Multiple reasons J&J vaccine "pause" not a recovery setback. Epicenter stocks significantly underperformed since mid-March, but EPS revisions = good and Technicals, while damaged, are still positive

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY:  Equities yesterday show fire, ready, aim still default reaction in pandemicGlobal markets were roiled yesterday by the FDA's announcement to pause the J&J vaccine, out of an abundance of caution stemming from a rare blood clot side effect detected in 6 women administered the J&J COVID-19 vaccine.  This is a pretty serious blood clot called Cerebral Venous Sinus Thrombosis and is a type of stroke (Hopkins article on CVST).  - overall, the media and news coverage of yesterday's events were very useful to meBut I was surprised that Street analyst commentary seemed to focus on explaining the mechanisms of how the drug might contribute to clotting, but provided little context whether these incidences are outside of normal chances, and also whether COVID-19 side effects itself were worse. Source: /2021/04/13/health/blood-clots-johnson-vaccine. html... Equities went full stay at home yesterday, selling Epicenter stocks againGiven the prospect for a delay in vaccine deployment, plus added fear by those vaccine scared and just general uncertainty around COVID-19, equity markets reacted sharply initially and even through the close:- Nasdaq 100 rallied +1.2% as stay at home and Growth became safe havens- Russell 2000 fell as much as 2.5% before closing flat, reflecting its status as an Epicenter proxy tradeIn other words, financial markets viewed the FDA pause as a setback for the Epicenter/re-opening window.  I have learned not to stay too long in a fight with the tape but to me, this strikes me as a massive over-reaction. Source: Fundstrat and Bloomberg... Some reasons to view the FDA pause as really a short-term pauseWhy?  There are 3 things I want to highlight.  And if these prove to be correct, the J&J vaccine will likely be re-introduced to the market shortly.  I am not a scientist, and I am clearly out of my area of expertise.  But let me share some perspective that seemed to be overlooked yesterday:1. According to Johns Hopkins, in any year, CVST is seen in 1 in 1 million adults and 3 in 300,000 individuals under age 18 (thanks NT for the heads up) /health/conditions-and-diseases/cerebral-venous-sinus-thrombosis2. Pfizer CEO, Albert Bourla, yesterday announced PFE will deliver to USA 20 million additional doses by May and the full 300 million two weeks early, offsetting any supply shock Source: also,  COVID-19 disease side effects show even more severe risk of blood clots with 7.8% pulmonary embolism, 11.2% get deep-vein thrombosis and 1.6% have a stroke Source:  other words, it almost seems the risks identified with the J&J vaccine are far less than the disease itself.  And perhaps more importantly, CVST is found in the US annually.  I realize the pause yesterday is also an invitation for doctors to provide additional case information, so the actual incidence rate might be more than 6 of the 6.8 million vaccinated with J&J. STRATEGY: Epicenter stocks significantly underperformed since mid-March, but EPS revisions = good and Technicals, while damaged, are still positiveFor the past two to three weeks, Epicenter stocks, and the proxies IWM (Russell 2000 ETF) and XLE and OIH (Energy) have been struggling.  Part of this is equity markets have become somewhat defensive, favoring stay at home and Growth stocks and yesterday's fire ready aim to the J&J vaccine pause amplified this trend. But in some ways, yesterday could be viewed as maximum negative pain for the Epicenter trend.  While headlines could certainly get worse, a US vaccine getting paused is certainly optically as bad as one can imagine.  And the 2.5% intraday crash of IWM is evident of this. And despite the rough two to three weeks for small-caps (IWM), the technical picture is still solid.  The IWM is sitting just underneath the 50D moving average and still solidly above the 200D. So the technical picture, while damaged, is not broken.  And I am sort of ignoring the potential head and shoulders pattern, simply because this is a pretty obvious pattern. Source: Fundstrat and BloombergAnd the bigger more important milestone in the coming weeks is 1Q2021 EPS season.  In some ways, investors view it as officially starting with banks, which report Wednesday.  And this is the first real quarter we can see operating leverage at work. - topline revenues are forecast to rise 6.5% YoY, the first real increase in revenues since the pandemic started- Granted, 1Q2020 is an easy comp because there were only two months of business during that quarter, and March 2020 was a lost monthBut companies will also talk about visibility and re-opening plans.  So there will be a lot of useful information coming over the next few weeks. Source: Fundstrat and Bloomberg STRATEGY: Updating our Power Trifecta, adding net 10 stocks, now Power Trifecta 35 (*)We are updating our Power Trifecta list. In this rebalance, 3 stocks are deleted and 13 stocks are added. Thus, the total number of stocks has risen by 10 to 35. This makes sense given the recent pullback in the Epicenter names (more stocks are attractive). 3 Deletions:$PBCT, $NVT, $VNO 13 Additions:$AZO, $HOG, $GRMN, $MGM, $WH, $GPS, $LB, $VIRT, $AGCO, $OC, $UBER. $EXP, $NUE 35 Power Trifecta Stocks Ideas:Consumer Discretionary:$AZO, $HOG, $GRMN, $RL, $MGM, $NCLH, $RCL, $WH, $GPS, $LB Financials:$NYCB, $VIRT Industrials:$AGCO, $OC, $DAL, $KEX, $UBER Energy:$XOM, $HP, $NOV, $SLB, $COP, $EOG, $MRO, $MUR, $HFC, $PSX Materials:$EXP, $NUE Real Estate:$BXP, $HIW, $JBGS, $UDR, $KIM, $WRI Source: Fundstrat, Bloomberg (*) the 35 Power Epicenter Trifecta stock ideas are the subset of the original 108 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 108 Epicenter Trifecta stock ideas, please click here ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 72,417, +16,547 vs 7D ago..._____________________________Current Trends -- COVID-19 cases: - Daily cases    72,417 vs 55,870 7D ago, up +16,547- 7D positivity rate   5.4% vs 4.7% 7D ago- Hospitalized patients   40,902  up +5.1% vs 7D ago- Daily deaths    726,  down -4.1% vs 7D ago_____________________________- The latest COVID-19 daily cases came in at 72,417, up +16,547 vs 7D ago.  - 7D delta in daily cases has been fluctuated in the past few days. And yesterday this figure jumped to 16,547, the highest level since January. Looking at the state level data, Michigan is still the biggest contributor of the 7D delta jump. Michigan reported near 8,867 new cases yesterday, nearly 4,000 more than 7 days ago. Other than Michigan, Florida also reported large amount of new cases yesterday. However, the surge of daily cases in Florida is primarily due to the low number of tests reported yesterday. Hence, yesterday's surge in Florida is just a true-up.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments7D delta in daily cases have been fluctuated in the past few days...- 7D delta in daily cases has been fluctuated in the past few days. And yesterday this figure jumped to 16,547, the highest level since January.- Looking at the state level data, Michigan is still the biggest contributor of the 7D delta jump. Michigan reported near 8,867 new cases yesterday, nearly 4,000 more than 7 days ago.- Other than Michigan, Florida also reported large amount of new cases yesterday. However, the surge of daily cases in Florida is primarily due to the low number of tests reported 2 days ago. Hence, yesterday's surge in Florida is just a true-up.    Source: Fundstrat and state health departments  US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments  Source: Fundstrat and state health departmentsPOINT 2: VACCINE: 48 states near ~60% infected + vaccinated..._____________________________Current Trends -- Vaccinations: Vaccinations ramping steadily- avg 3.4 million this past week vs 3.0 million last week- overall, 22.5% fully vaccinated, 36.6% 1-dose+ received_____________________________Vaccination frontier update --> 48 states now near or above 60% combined penetration (vaccines + infections)Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity.  That is, the combined value of infections + vaccinations as % population > 60%.- Currently, 48 states (see below) are basically all at this level- SD, ND and RI are now above 90% combined penetration (vaccines + infections)- So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 48 states represent about 94.8% of the US population. In fact, 66% of US states (based on state population) have seen combined infection and vaccination >70% and 14.0% of US states have seen combined infection and vaccination >80%.  As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 2,580,028 doses administered on Tuesday, up from 7D ago. Overall, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). In fact, the vaccination path (measured by 7D average to eliminate seasonality) has reached its all time high, on average, ~3,370,000 doses were administered on each day in the past 7 days. Source: CDC and Fundstrat  ~68.6% of the US has seen 1-dose penetration >35%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 20%/25%/30% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 89.5% of US states have seen 20% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 25% of its residents fully vaccinated, this figure is 20.1%. And currently only Alaska has seen 30% of its residents fully vaccinated.- While 95.2% of US states have seen vaccine penetration >30%, 68.6% of them have seen 1 dose penetration >35% and only 12.0% of them have seen 1 dose penetration > 40%.- 89.5% of the US has at least 20% of its residents fully vaccinated, However, only 20.1% of US has fully vaccinated >25%- This is still a small figure but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days- this means 50 vaccines dosed for every 1 confirmed caseThis figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 121 million Americans have received at least 1 dose of a vaccine.  This is a good pace and as we noted previously, implies 50% of the population by May.   Source: CDC and Fundstrat POINT 3: Tracking un-restricted and restriction-lifted statesWe are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates.  Keep in mind, easing/lifting restrictions can take multiple forms:- easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandatesSo there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1:  States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states- that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions.  The dates are indicated on each chart.  The cases trends in these states have been mostly positive, with perhaps the exception of NY state:- NY state case levels seem awfully stubborn at these high levels- weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: Global cases within 8% of all-time highs, even as USA down 80%. Energy down 8 of the last 10 days, in past 20 years >8 of last 10 days point to strong 3M gains

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Energy down 8 of the last 10 days, in past 20 years >8 of last 10 days point to strong 3M gainsDaily vaccinations hit an all-time high again in the US at 3,200,732 (based on 7D average). If there is anything we have learned over the past year, forecasting COVID-19 has been virtually impossible, in part because of the multiple effects of population behavior, plus weather (seasonal effects) plus mutations.  On the other hand, research continues to support that those infected and those vaccinated are less likely to: spread and catch the disease.  And if one does catch it, while vaccinated or re-infected (rare), severity can be reduced.  Thus, the cumulative impact of infections and vaccinations should be reducing the overall impact of COVID-19 in terms of hospitalizations. Michigan is of particular focus at the moment because cases and hospitalizations are surging and likely to take out prior all-time highs.  The rare state that is seeing this happen.- But Michigan is also among the states with the lowest combined infections + vaccinations at ~60%- States with higher combined ratios have an exponentially lower rate of hospitalizations- ND, SD and RI have the highest combined ratio and only 93 hospitalized per million- states with 60%-65% combined are 1,689 per 1mm. Huge difference.  So again, it appears vaccinations are having a positive impact.  ... do restrictions make a difference? Again, Michigan is an outlier because the state has in place some of the strictest restrictions, and yet, daily cases are surging to new highs.  While the CDC today called for Michigan to shut down and not get extra vaccines.- shutting down is a blunt instrument- and other states have not pursued shutdowns and yet have managed to contain the virus Source: NY TimesAnd we realize that guidance from trusted advisors is important to heed.  However, not all the advice given by these advisors has been necessarily correct.  Today, Dr Fauci reiterated his view that indoor dining is not safe.  Below is a link to an interview he did on MSNBC. His rationale is reasonable, that since daily cases are high, Americans should not be taking unnecessary risks.- but the key question is whether indoor dining is actually a source of infection spread- there have not been any recent studies that have made this evident one way or another Source:  fact, recall the White House and advisors all expected Texas to have a massive new surge after lifting restrictions on March 14th, 2021.  Even Dr. Fauci called it risky and potentially dangerous.- yet, a month later, Dr. Fauci is not sure why Texas doesn't have a COVID-19 uptickI am not disagreeing with Dr. Fauci and his advice. He has been offering sage advice.  However, I am not very comfortable with the idea that US policy makers’ solution to an outbreak is shut things down again -- ala Europe.  That has caused fits and starts in Europe, lots of protests and ultimately, a mixed outcome in terms of the disease. Source:/news-fauci-texas-covid-surge-trigger/ COVID-19 looks to be approaching an all-time high in cases again... US has managed to stem the surge in cases, via vaccinations. While cases are not down to zero in the US, the mitigation has been enough for the US to pursue largely opening the economy by mid-June.  Asia has been largely able to contain COVID-19, using their restrictive measures.  Similarly, Australia.  - this chart shows US is among the highest globally in terms of % of adults vaccinated (>1 dose)- Israel, Chile and UK are higher But as the global case count below shows, COVID-19 is still spreading wildly and prolifically across the World.  In fact, the 7-day avg cases of 670,000 (and rising rapidly) is not that far from the all-time high of 728,000 seen in December 2020.- the difference is Latin America and India+Pakistan are accounting for this recent surge As shown below, India is now #2 in the world for daily cases.  And just edging out Latin America.  Both places are reporting >150,000 cases per day.  This is about 3X the US average. STRATEGY: Energy has been down 8 of the last 10 days, something only seen 3.5% of trading sessions in past 20 yearsEnergy has fallen in 8 of the last 10 trading sessions as shown below. The total decline has been 4.5% but the streak of 8 of 10 days is notable.  Overall, Energy has been acting heavy and the sector still does not have broad acceptance by institutional investors, despite being the best performing sector YTD and the sector with the strongest EPS revisions YTD (see note from yesterday).  Multiple headwinds can be cited by investors from:- oil has stalled- COVID-19 outbreak could resurge, hurting re-opening- EV and ESG is going to eliminate the sector- Oil companies are bad businesses- stocks are too small to be part of the benchmarkEnergy (ETF XLE) is hovering near the 50-day moving average at $47.81 vs $48.07, so we are at this important decision point for XLE. - The last such decision point was in late January, and at that time, XLE then surged 40%We might be able to discern a clue to Energy's next move, based upon the fact it is down 8 of last 10 days. Looking at the last 20 years, whenever XLE is down 8 of last 10 days, or more, the forward returns for XLE are quite strong:- down 8 of last 10 days, 3M forward 2.7% (3.5% instances)- down 9 of last 10 days, 3M forward 7.1% (0.5% instances)- down 10 of last 10 days, 3M forward 10.8% (only 2 times in 20 years)So you can see, we are reaching a point where Energy is extremely oversold.  And this, coupled:- with positive EPS revisions- positive fundamental upside (demand)- supply constraints- negative sentiment And we think Energy is worth enduring, despite the recent material decline in the stocks. Source: Fundstrat and BloombergThe bigger picture, in our view, remains supportive of Energy.  As we discussed in our 2021 outlook, Energy has a favorable alignment of supply and demand taking place.  Supply is constrained both by the White House (favors renewables) and capital markets (few projects funded) while demand could surprise later this year as the economy re-opens and jet travel resumes.- Energy (XLE) is touching its 50D moving average- This touch happened in late-Jan, and as we noted above, was followed by a strong rally- We think this touch will also play out in a similar way Source: Fundstrat and Bloomberg... Earnings season starts this week and Energy is by far the sector with the best EPS revisionsEarnings season will kick off this week and we expanded the EPS trends to show all sectors below. This chart is calendar 2021 EPS and the revisions since the start of the year:- S&P 500 EPS estimates are up 6%- Energy is up 83%- Basic Materials is up 14%No other sector is even close. STRATEGY: Updating our Power Trifecta, adding net 10 stocks, now Power Trifecta 35 (*)We are updating our Power Trifecta list. In this rebalance, 3 stocks are deleted and 13 stocks are added. Thus, the total number of stocks has risen by 10 to 35. This makes sense given the recent pullback in the Epicenter names (more stocks are attractive). 3 Deletions:$PBCT, $NVT, $VNO 13 Additions:$AZO, $HOG, $GRMN, $MGM, $WH, $GPS, $LB, $VIRT, $AGCO, $OC, $UBER. $EXP, $NUE 35 Power Trifecta Stocks Ideas:Consumer Discretionary:$AZO, $HOG, $GRMN, $RL, $MGM, $NCLH, $RCL, $WH, $GPS, $LB Financials:$NYCB, $VIRT Industrials:$AGCO, $OC, $DAL, $KEX, $UBER Energy:$XOM, $HP, $NOV, $SLB, $COP, $EOG, $MRO, $MUR, $HFC, $PSX Materials:$EXP, $NUE Real Estate:$BXP, $HIW, $JBGS, $UDR, $KIM, $WRI Source: Fundstrat, Bloomberg (*) the 35 Power Epicenter Trifecta stock ideas are the subset of the original 108 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 108 Epicenter Trifecta stock ideas, please click here ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 61,389, -4,794 vs 7D ago... Easter is throwing off the 7D delta... case trends still stable_____________________________Current Trends -- COVID-19 cases: - Daily cases    61,389 vs 66,183 7D ago, down -4,794- 7D positivity rate   5.2% vs 4.7% 7D ago- Hospitalized patients   39,726  up +7.1% vs 7D ago- Daily deaths    717,  down -5.9% vs 7D ago_____________________________- The latest COVID-19 daily cases came in at 61,389, down -4,794 vs 7D ago.  - 7D delta in daily cases has been fluctuated in the past few days. This was primarily due to the data distortion 7D ago (in observance of the holidays). That said, the overall case trend is still stable. The positivity rate has been flat-lined, at ~5%, since the start of March. The number of currently hospitalized people has been up slightly, while the number of daily deaths continues to trend downward.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments7D delta in daily cases have been fluctuated in the past few days- primarily due to the data distortion last week... However, the overall case trend is still stable. The positivity rate has been flat-lined, at ~5%, since the start of March. The number of currently hospitalized people has been up slightly, while the number of daily deaths continues to trend downward.   Source: Fundstrat and state health departments   US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments  Source: Fundstrat and state health departmentsPOINT 2: VACCINE: 48 states near ~60% infected + vaccinated..._____________________________Current Trends -- Vaccinations: Vaccinations ramping steadily- avg 3.2 million this past week vs 3.0 million last week- overall, 22.2% fully vaccinated, 36.1% 1-dose+ received_____________________________Vaccination frontier update --> 48 states now near or above 60% combined penetration (vaccines + infections)Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity.  That is, the combined value of infections + vaccinations as % population > 60%.- Currently, 48 states (see below) are basically all at this level- SD, ND and RI are now above 90% combined penetration (vaccines + infections)- So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 48 states represent about 94.8% of the US population. In fact, 64.5% of US states (based on state population) have seen combined infection and vaccination >70% and 9.5% of US states have seen combined infection and vaccination >80%.  As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 2,634,400 doses administered on Monday, up 24% from 7D ago. Overall, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat  ~92.0% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 20%/25%/30% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 80.5% of US states have seen 20% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 25% of its residents fully vaccinated, this figure is 18.8%. And currently no states have seen 30% of its residents fully vaccinated.- While all US states have seen vaccine penetration >25%, 92.0% of them have seen 1 dose penetration >30% and only 62.1% of them have seen 1 dose penetration > 35%.- 80.5% of the US has at least 20% of its residents fully vaccinated, However, only 18.8% of US has fully vaccinated >25%- This is still a small figure but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days- this means 50 vaccines dosed for every 1 confirmed caseThis figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 120 million Americans have received at least 1 dose of a vaccine.  This is a good pace and as we noted previously, implies 50% of the population by May.   Source: CDC and Fundstrat POINT 3:Tracking un-restricted and restriction-lifted statesWe are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates.  Keep in mind, easing/lifting restrictions can take multiple forms:- easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandatesSo there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1:  States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states- that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions.  The dates are indicated on each chart.  The cases trends in these states have been mostly positive, with perhaps the exception of NY state:- NY state case levels seem awfully stubborn at these high levels- weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: Michigan COVID-19 hospitalizations could surge to new highs in coming weeks. S&P 500 gains YTD explained by +6.4% revisions to 2021 EPS by Street

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: S&P 500 gains YTD explained by +6.4% revisions to 2021 EPS by StreetFor the most part, US COVID-19 trends have been stable. Below is the 7D delta chart and while it has been choppy, the trend in cases is not necessarily accelerating to the upside. But the overall US state figures are masking the bifurcating trends in the US. The rise in cases is really attributable to 5 states: - MI- ME- MD- MN- VT Source: Fundstrat and US state healthcare websites Take a look for yourself at the 50 states here (slide from our chartbook) and you can see the rise in these 5 states versus their own timeline. There are other states seeing increases, but hardly of this magnitude. Is there a common thread to explain this? I am not entirely clear. And of these states, MI seems to be experiencing the worst of the surges. Gov Whitmer has attempted multiple explanations for this from mutations to vulnerability of population due to low prior exposure. But the reasons are not entirely clear to me: - the state's daily cases could make a new all-time high and the 7D avg seems to be there- currently hospitalizations certainly look to be making new highs- perhaps there is some solace that daily deaths are muted And Dr Scott Gottlieb weighed in on Michigan, noting that the Biden administration may need to allocate new resources to the state. While MI Gov Whitmer would like additional vaccine allocations, the Biden administration is targeting other measures. Source: And if there is some half-full view of the situation in Michigan. It appears that the older adults are accounting for a smaller rise in cases. The surge in daily cases stems from age 20-29 and by contrast, age 70-79, while higher, is considerably more muted. Thus, one might believe this could reflect the benefit of vaccinations. STRATEGY: 1Q2021 Earning seasons starts soon... S&P 500 2021 EPS revised +6.4% so far, Energy +80%... Earning season is starting in the next few weeks, and 1Q2021 will differ from the last 4 earnings season for a few reasons: - top-line growth is expected to be solidly up YoY (due to March 2020 being easy comps) - company visibility should be considerably stronger for 2021, compared to three months ago - economy should be largely open by mid-June, so companies are going to see roadmap to normalcy finally - Cyclicals are leading the upwards earnings revisions ...S&P 500 2021 EPS forecasts are up 6.4% since start of year while Energy is up +80% Earnings revisions have solidly for 2021 and in fact, have largely explained the YTD gains in equities. - S&P 500 2021 EPS is +6.4% to $174.33 - S&P 500 is up ~10% YTD - Most of the gains YTD are due to EPS revisions to 2021 EPS Source: Fundstrat and Bloomberg ... Energy 2021 EPS is +80% in 2021 and yet the stocks are only up +27%... hmmmmThe positive revisions to the Energy sector have been even stronger: - Energy has seen 2021 EPS revised +80% since the start of the year.- Energy stocks are up +27% YTD So Energy EPS is up +80%, only 3 months in 2021. And yet, investors think this sector is not attractive? To me, this is old-fashioned beat and raise for Energy. Source: Fundstrat and Bloomberg Our Head of Global Portfolio Strategy, Brian Rauscher, made a similar comment in his latest Wall Street Whispers report which was published late last week. He notes there has been no deterioration in the favorable readings for Energy stocks. Hence, he think this is simply profit taking hitting the stocks. Source: Fundstrat ... Epicenter leading positive revisions only 3 months in 2021, suggesting these stocks lead during earnings season I am going to state something potentially obvious: - Epicenter stocks have been driving the positive 2021 EPS revisions YTD - Visibility is improving as US should be fully opened by mid-June - We are only 3 months into 2021, thus, positive revisions should continue To me, this seems like a formula for Epicenter stocks to continue to lead. And as shown below, since the start of April, Epicenter stocks have been performing well, except for Energy, which is down since the start of the month. In our view, Energy is way oversold and given the potential for positive EPS surprise, we expect Energy stocks to recover over the coming weeks. Source: Fundstrat and Bloomberg STRATEGY: Updating our Power Trifecta, adding net 10 stocks, now Power Trifecta 35 (*)We are updating our Power Trifecta list. In this rebalance, 3 stocks are deleted and 13 stocks are added. Thus, the total number of stocks has risen by 10 to 35. This makes sense given the recent pullback in the Epicenter names (more stocks are attractive). 3 Deletions:$PBCT, $NVT, $VNO 13 Additions:$AZO, $HOG, $GRMN, $MGM, $WH, $GPS, $LB, $VIRT, $AGCO, $OC, $UBER. $EXP, $NUE 35 Power Trifecta Stocks Ideas:Consumer Discretionary:$AZO, $HOG, $GRMN, $RL, $MGM, $NCLH, $RCL, $WH, $GPS, $LB Financials:$NYCB, $VIRT Industrials:$AGCO, $OC, $DAL, $KEX, $UBER Energy:$XOM, $HP, $NOV, $SLB, $COP, $EOG, $MRO, $MUR, $HFC, $PSX Materials:$EXP, $NUE Real Estate:$BXP, $HIW, $JBGS, $UDR, $KIM, $WRI Source: Fundstrat, Bloomberg (*) the 35 Power Epicenter Trifecta stock ideas are the subset of the original 108 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 108 Epicenter Trifecta stock ideas, please click here ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 46,821, +9,265 vs 7D ago... Easter is throwing off the 7D delta... case trends still stable _____________________________ Current Trends -- COVID-19 cases:- Daily cases 46,821 vs 37,556 7D ago, up +9,265- 7D positivity rate 5.1% vs 4.8% 7D ago- Hospitalized patients 39,171 up +6.4% vs 7D ago- Daily deaths 716, down -8.9% vs 7D ago_____________________________ - The latest COVID-19 daily cases came in at 46,821, up +9,265 vs 7D ago.- 7D delta in daily cases surged last Friday and today. This was primarily due to the underreport 7D ago (in observance of the holidays). That said, the overall case trend is still stable. The positivity rate has been flat-lined, at ~5%, since the start of March. The number of currently hospitalized people has been up slightly, while the number of daily deaths continues to trend downward.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments 7D delta in daily cases surged last Friday and today - primarily due to the data distortion last week... 7D delta in daily cases surged last Friday and today. This was primarily due to the underreport 7D ago (in observance of the holidays). That said, the overall case trend is still stable. The positivity rate has been flat-lined, at ~5%, since the start of March. The number of currently hospitalized people has been up slightly, while the number of daily deaths continues to trend downward. Source: Fundstrat and state health departments US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments POINT 2: VACCINE: 48 states (+2 from last Thursday) near ~60% infected + vaccinated... _____________________________ Current Trends -- Vaccinations: Vaccinations ramping steadily - avg 3.1 million this past week vs 3.1million last week - overall, 21.7% fully vaccinated, 35.7% 1-dose+ received _____________________________ Vaccination frontier update --> 48 states now near or above 60% combined penetration (vaccines + infections) Below we sorted the states by the combined penetration (vaccinations + infections). As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity. That is, the combined value of infections + vaccinations as % population > 60%. - Currently, 48 states (see below) are basically all at this level - SD, ND and RI are now above 90% combined penetration (vaccines + infections) - So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 48 states represent about 94.8% of the US population. As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 3,555,818 doses administered on Sunday, up 6.1% from 7D ago. Overall, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat ~92.0% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 20%/25%/30% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 80.5% of US states have seen 20% of their residents fully vaccinated. However, when looking at the percentage of the US with at least 25% of its residents fully vaccinated, this figure is 11.6%. And currently no states have seen 30% of its residents fully vaccinated. - While all US states have seen vaccine penetration >25%, 92.0% of them have seen 1 dose penetration >30% and only 52.1% of them have seen 1 dose penetration > 35%. - 80.5% of the US has at least 20% of its residents fully vaccinated, However, only 11.6% of US has fully vaccinated >25% - This is still a small figure but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days - this means 50 vaccines dosed for every 1 confirmed case This figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 118 million Americans have received at least 1 dose of a vaccine. This is a good pace and as we noted previously, implies 50% of the population by May. Source: CDC and Fundstrat POINT 3:Tracking un-restricted and restriction-lifted states We are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates. Keep in mind, easing/lifting restrictions can take multiple forms: - easing indoor capacity - opening theaters, gyms, salons, saloons - eliminating capacity restrictions - eliminating mask mandates So there is a spectrum of approaches. Our team is listing 3 tiers of states and these are shown below. - states that eased in 2020: AK, OK, MO, FL, TN - states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD - states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1: States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states - that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions. The dates are indicated on each chart. The cases trends in these states have been mostly positive, with perhaps the exception of NY state: - NY state case levels seem awfully stubborn at these high levels - weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: Death rates collapse when state vaccine penetration >33%. Even as equities favor "quality" trade, credit sticks with "cyclical" trade (hint, credit usually wins). Implies IWM $239

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: While equities do quality trade, credit stick with cyclicals (credit usually wins) and implies IWM should be $239 vs $223 currently... COVID-19 trends have been fairly stable in the past few weeks (vs the sharper declines in cases seen earlier in the year) but as we wrote about in recent weeks, daily cases is not necessarily the important benchmark. Vaccinations are increasing and averaged 3.0 million this week. And many states are moving forward with re-openings. And as we noted earlier this week, it was a milestone to see CA announces a full re-opening by June 15th. Given that state has been so conservative, essentially the entire US will be open by mid-June._____________________________ Current Trends -- COVID-19 cases:- Daily cases 73,907 vs 71,277 7D ago, up +2,630- 7D positivity rate 4.8% vs 5.0% 7D ago- Hospitalized patients 39,840 up +7.2% vs 7D ago- Daily deaths 722, down -18% vs 7D ago Vaccinations ramping steadily- avg 3.0 million this past week vs 2.9 million last week- overall, 19.8% fully vaccinated, 33.5% 1-dose+ received_____________________________ A positive recent development is that patients who have chronic (long haul) COVID-19 symptoms seem to benefit from the vaccines. Multiple stories have emerged of formerly recovered, with severe symptoms, suddenly seeing an easing of their symptoms. This includes the disappearance of fatigue, brain fog and even loss of smell. While the mechanism is not entirely clear, scientists think this might be the result of the vaccine assisting the body in ridding itself of any lingering virus. - this is a support for vaccinating all Americans, including those who already have been infected. Source: /health/long-haul-covid-vaccine/2021/03/16/6effcb28-859e-11eb-82bc-e58213caa38e_story. html Death rate (~death to cases) might be a better way to see vaccine effectiveness One of our long-time clients (thanks RJ+AR) asked us to look at COVID-19 death rate trends. And we realized this was actually an important metric to measure progress, particularly given vaccinations: - as older cohorts get vaccinated, risk of infection lower (lower death rate) - vaccine has been shown to limit severity of disease (lower death rate) So naturally, death rates should be falling and presumably fall eventually to 0%. The death rate from COVID-19 has been steadily declining and is now touching 1.1%. The 1.1% figure is progress from 3% in mid-Feb but it is also not as low as the 0.8% and 1.0% seen at the nadirs after Wave 1 and Wave 2. And it means that roughly 1 in 100 confirmed COVID-19 cases leads to death. So this figure is low but really not low enough. - there are reasons to expect this figure to drop below 1.0% as vaccination penetration grows - state-level data shows there is an exponential drop in death rates as vaccine penetration grows US death rates collapse when state vaccine penetration exceeds 33% Take a look at the comparative ratio of vaccine penetration (x-axis) and death rates (y-axis). The key to understanding the chart below is to realize the Y-axis is log scale. Thus, if this chart is true, as vaccine penetration rises, the death rate should be exponentially collapsing: - indeed, this seems to be the case - death rates collapse when vaccine penetration reaches 33%, roughly - states with higher vaccine penetration have seen death rates drop to 0.05%, or 1/20th the US levels So, it does seem to be true that vaccinations are leading to a drop in mortality rates in the real world. This is a good thing. Hospitalizations rising in 6 states, but not really elsewhere... We have shown total hospitalized patients, by state, in this chart matrix below. And we have circled in red where there seems to be a pronounced rise in hospitalizations. There are 6 states where this seems to be the case: - CT - NJ - PA - MD - MI - VT These are mostly on the East Coast, with the exception of Michigan. And as the chart below highlights, MI situation actually looks the most severe and troublesome. Again, I cannot fully explain why cases and hospitalizations are surging. Clearly it is some combination of variants, holidays, etc. - but mutations are seen in CA and FL and hospitalizations are not rising in those states. Source: Fundstrat and state healthcare websites STRATEGY: Equities are acting defensive, even as VIX and high-yield say risk on... Since the start of 2Q2021 (April 1), equity markets have taken on a somewhat defensive tone. We expected a face ripper rally this month: - so far, the S&P 500 is up 3.1% (qualifies as face ripping)- but it is strikingly Defensive, evidenced by the leadership of Nasdaq 100 (was 2020's defensive trade)- clients have told us they are shifting to a quality bias because economic momentum has peaked- and others worry that a market top is near given the warnings from technicians and also the specter of tax hikes In any case, while equities are doing very well in April, there is a marked defensive aka 'quality tone to leadership. Source: Fundstrat and Bloomberg DIVERGENCE: Equities shift to quality while credit favors cyclical = divergenceMany of our clients have been saying that they are shifting into quality stocks away from cyclicals, because we are peaking in economic momentum. However, a curious thing is happening. - while stocks are shifting to quality (Nasdaq 100 vs Russell 2000)- credit markets still favor cyclical (high-yield beating investment grade) In other words, this quality shift is seen in stocks is not showing up in credit markets. Credit markets are very much risk-on and buying lower quality. Logically, quality in credit and equities have moved in lockstep. Below is a comparison of two quality indices that should be moving in lockstep: - Red credit quality index: high-yield bonds to investment grade bonds- Blue equity quality index: small-caps to NASDAQ 100 The last two weeks has seen the divergence, while credit has bid high-yield (low quality/cyclical), small-caps have dramatically underperformed Nasdaq 100 (equities shifted to quality). Source: Bloomberg and Fundstrat In fact, credit and equity have usually moved in lockstep in terms of quality. So these two indices have moved in tandem for many years. Below is the last 4 years and it is evident, quality moves in tandem. For the past 3 years, the correlation of these two indices is: - R-squared since 2018 is 94%, meaning, they have moved closely together Source: Bloomberg and Fundstrat Take a look at the YTD charts for VIX and high-yield bonds (HYG ETF as a proxy). - VIX continues to sink and is below 17- HYG surging dramatically since mid-March Recall, surging VIX is usually a sign of a market nervous. Similarly, High-yield does not rally when the macro environment is shaky. Thus, we have strong risk-on signals from VIX and credit. Source: Bloomberg and Fundstrat ...94% correlation between credit and equity quality indices and implies IWM should be at $239The natural question is what does this imply for small-cap stocks if equities catch up to the quality trade in credit. Foremost, we view small-caps as a good proxy for epicenter aka Cyclicals because of their higher composition of Cyclical stocks. - 94% correlation between equity and credit quality indices- we usually view credit as leading- coupled with VIX saying risk-on Check out the scatter chart below, which plots both indices (x-axis is credit, y-axis equities). And you can see that the current ratio is below the regression line. The regression says that at current credit levels: - Equity quality ratio should be 0.71- QQQ is $335.08- Implies IWM should be at $238.80 (all-time high) IWM is currently at $222.56, so this implies a +7% catch-up move coming for small-cap stocks. The catalyst could be 1Q2021 EPS season. Source: Fundstrat and Bloomberg STRATEGY: Updating our Power Trifecta, adding net 10 stocks, now Power Trifecta 35 (*)We are updating our Power Trifecta list. In this rebalance, 3 stocks are deleted and 13 stocks are added. Thus, the total number of stocks has risen by 10 to 35. This makes sense given the recent pullback in the Epicenter names (more stocks are attractive). 3 Deletions:$PBCT, $NVT, $VNO 13 Additions:$AZO, $HOG, $GRMN, $MGM, $WH, $GPS, $LB, $VIRT, $AGCO, $OC, $UBER. $EXP, $NUE 35 Power Trifecta Stocks Ideas:Consumer Discretionary:$AZO, $HOG, $GRMN, $RL, $MGM, $NCLH, $RCL, $WH, $GPS, $LB Financials:$NYCB, $VIRT Industrials:$AGCO, $OC, $DAL, $KEX, $UBER Energy:$XOM, $HP, $NOV, $SLB, $COP, $EOG, $MRO, $MUR, $HFC, $PSX Materials:$EXP, $NUE Real Estate:$BXP, $HIW, $JBGS, $UDR, $KIM, $WRI Source: Fundstrat, Bloomberg (*) the 35 Power Epicenter Trifecta stock ideas are the subset of the original 108 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 108 Epicenter Trifecta stock ideas, please click here ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AAP, AN, AZO, F, GM, HOG, BBY, GRMN, GPC, LEG, TPX, PHM, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, FL, GPS, KSS, LB, VFC, WTFC, ASB, FNB, PB, TFC, WBS, PACW, NYCB, MTG, EVR, IBKR, VIRT, BK, STT, BHF, AGCO, OC, ACM, WAB, GNRC, CSL, GE, GGG, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, JBHT, R, UBER, UHAL, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, EXP, CF, NEU, NUE, RS, SON, IP, ARE, BXP, HIW, JBGS, ESS, UDR, KIM, NNN, O, WRI, PSA Violence in USA:Full stock list here --> Click here (*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. POINT 1: Daily COVID-19 cases 73,907, +2,630 vs 7D ago... _____________________________ Current Trends -- COVID-19 cases:- Daily cases 73,907 vs 71,277 7D ago, up +2,630- 7D positivity rate 4.8% vs 5.0% 7D ago- Hospitalized patients 39,840 up +7.2% vs 7D ago- Daily deaths 722, down -18% vs 7D ago_____________________________ - The latest COVID-19 daily cases came in at 73,907, up +2,630 vs 7D ago.- 7D delta in daily cases has been flat-lined for the past 3-4 weeks. As we wrote above, even if the daily confirmed case figures have been stalled, the number of daily deaths and the death rate continue to trend downward. The rollout of COVID vaccines could be the reason of this development.- Also, at this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments 7D delta in daily cases has been flat-lined over the past 3-4 weeks... 7D delta in daily cases has been flat-lined for the past 3-4 weeks. As we wrote above, even if the daily confirmed case figures have been stalled, the number of daily deaths and the death rate continue to trend downward. The rollout of COVID vaccines could be the reason of this development. Source: Fundstrat and state health departments US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments POINT 2: VACCINE: 46 states (+1 from Tuesday) near ~60% infected + vaccinated... _____________________________ Current Trends -- Vaccinations: Vaccinations ramping steadily - avg 3.0 million this past week vs 2.9 million last week - overall, 19.8% fully vaccinated, 33.5% 1-dose+ received _____________________________ Vaccination frontier update --> 46 states now near or above 60% combined penetration (vaccines + infections) Below we sorted the states by the combined penetration (vaccinations + infections). As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity. That is, the combined value of infections + vaccinations as % population > 60%. - Currently, 46 states (see below) are basically all at this level - SD, ND and RI are now above or near 90% combined penetration (vaccines + infections) - So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 46 states represent about 94.3% of the US population. As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 3,388109 doses administered on Thursday, flat from 7D ago. However, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat ~75.7% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 15%/20%/25% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, almost all US states have seen 15% of their residents fully vaccinated. However, when looking at the percentage of the US with at least 20% of its residents fully vaccinated, this figure is 40.5%. And only NM, SD, RI, AK and ME have seen 25% of its residents fully vaccinated - 1.9% of US population. - While almost all US states have seen vaccine penetration >25%, 75.7% of them have seen 1 dose penetration >30% and only 44.0% of them have seen 1 dose penetration > 35%. - Almost all of the US has at least 15% of its residents fully vaccinated, However, only 40.5% of US has fully vaccinated >20% - This is still a small figure (15%/20% of residents fully vaccinated) but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~45 for the past few days - this means 45 vaccines dosed for every 1 confirmed case This figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 111 million Americans have received at least 1 dose of a vaccine. This is a good pace and as we noted previously, implies 50% of the population by May. Source: CDC and Fundstrat POINT 3:Tracking un-restricted and restriction-lifted states We are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates. Keep in mind, easing/lifting restrictions can take multiple forms: - easing indoor capacity - opening theaters, gyms, salons, saloons - eliminating capacity restrictions - eliminating mask mandates So there is a spectrum of approaches. Our team is listing 3 tiers of states and these are shown below. - states that eased in 2020: AK, OK, MO, FL, TN - states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD - states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1: States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states - that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions. The dates are indicated on each chart. The cases trends in these states have been mostly positive, with perhaps the exception of NY state: - NY state case levels seem awfully stubborn at these high levels - weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: CA set to re-open by June 15th, suggesting entire USA will be open by then. Rates > ISM for Epicenter trade. Institutions might be buying these 12 Growth stocks disguised as "Epicenter"

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Rates > ISM for Epicenter trade.  Institutional investors buying Growth stocks disguised as EpicenterCase trends in COVID-19 might be stabilizing, versus the rising trend seen since mid-MarchDaily US COVID-19 case trends might be stabilizing as shown on this chart below.  This is one of our key charts and measures daily cases vs 7D ago.  And as shown, this figure had been rising since mid-March but now seems to be stabilizing.  And even trending down:- cases were rising recently, not entirely clear why, but maybe combo of vaccine boldness and Spring Break- MI cases have somewhat flattened out at 5,000 per day.  But this is virtually the same as FL and NY- MI is a lot smaller than either state, so MI is an outlier to an extent   Source: Fundstrat and state health departments    ... CA reopening on June 15th argues the entire USA will be fully re-opened by June 15thIn another sign yet that US is making progress against COVID-19, CA Gov Gavin Newsome today announced that the state could fully re-open on June 15th.  The mask mandate would still be in place, and an opening is subject to two criteria:- sufficient vaccine supply for all CA adults (on track)- hospitalization rates remain stable and low (not clear)CA has been among the most restrictive of states.  And if they are pursuing a re-opening, one could argue that the entire US is likely fully re-opened by June 15th. Source: investors suggest since economic momentum peaking, time to rotate back into GrowthToday a few clients forwarded this story to us, published by Bloomberg's Lu Wang.  This affirms what we have seen from our discussions with our institutional clients in both zooms and emails and phone calls (yes, we still do phone calls).  In general, there has been a general reluctance by hedge funds and institutional investors to buy Epicenter stocks aka Cyclicals.- BofA data shows cyclical exposure (of its clients) is lowest in decades- Morgan Stanley shows their clients are pulling back on Cyclical exposure in 2021The BofA exposure data, as the chart below shows, is really quite striking. /news/articles/2021-04-06/hedge-funds-see-something-in-the-reflation-trade-they-don-t-like? sref=NVS0rEaEPart of this stems from the growing consensus view that economic momentum is peaking.  The GDP growth rate print will peak in the next quarter or two, and as a consequence, many investors believe this peak in the data will signal a peak in Epicenter stocks relative to Growth. To use economic momentum as the sole signal, we think this is a somewhat overly simplified view of the drivers of Epicenter stocks.  But as the chart below shows, there is an approximate relationship between ISM and Epicenter vs Growth:- As PMIs rise, Epicenter stocks tend to outperform (see below)- But the relationship has weakened considerably over the last 20 years (gap widening) Source: Bloomberg and FundstratRe-opening economy plus infrastructure program creates supportive environment for cyclical stocks... There are multiple factors at play, beyond just economic momentum, and let me list a few reasons why a peak in economic momentum is not necessarily a peak in Epicenter stocks:- US economy just emerging from a Depression and seems early to call it mid-cycle- Epicenter companies have undergone dramatic cost cutting, hence, we believe there will be a substantial operating leverage story in the coming 24 months- Meaning EPS beats coming = re-rate higher EPS + higher P/E- US could pass a massive infrastructure program (Tom Block sees a 75% chance by Fall)- US infrastructure spending has lagged for nearly 15 years, hence, substantial justificationOn this latter point, look at this data from Morgan Stanley which shows a near $1.25T gap in real government spending.  Thus, this essentially provides a greater argument for a massive stimulus program. Source:  important, interest rates seem to be more important to Epicenter vs Growth, moreso than PMIs... Arguably, the more important macro driver for Epicenter stocks (vs Growth) is the trend in interest rates.  This reflects both the positive impact of higher rates (on Epicenter topline, balance sheet heavy tailwind too) and negative effects (discount rate for Growth stocks).  The chart below is the past 18 months:- as the US 10Y has risen (red line)- notice the near perfect tracking of Epicenter vs Nasdaq 100? Yes, interest rates matter. Source: Bloomberg and Fundstrat Even zooming out for the past 20 years, one can see this relationship has held pretty strongly.  In other words, rates matter more than ISM for the relative performance. Source: Bloomberg and Fundstrat $SPHB $QQQNaturally, this raises the question about whether interest rates will rise into year-end or fall into year-end.  I simply don't know.  To me, interest rates are highly unpredictable, just as unpredictable as equity markets. But if I had to look at the factors influencing rates:- US economic outlook strengthening = bias higher rates- US deficit spending rising = bias higher rates- inflationary pressures are likely higher vs lower = higher rates- global growth is improving = bias higher ratesEXTRA CREDIT: Demographics could also argue for higher interest ratesSo, in summary, there seems to be factors pushing towards higher rates.  If interest rates are set to move higher, this is a tailwind for Epicenter stocks.... Demographics might argue for higher ratesTake a look at the growth rate of Americans age 30-50, or prime age, and notice how it has varied over time.  - since 2016, this figure has actually turned positive and similar to the upturn 1972 onwards- notice how US interest rates moved up sharply following this? Multiple factors support this relationship, but simply, prime age adults are prime concerns and simultaneously prime workforce (highest skills), so this has a reflationary impact on the economy.  Thus, a rise in this cohort is reflationary and thus interest rates rise.- If this is true, the upturn in this cohort through 2030 argues for a structural rise in rates In fact, even the upturn in prime age Americans also argues for CPI or inflation to rise.  Since 1935, there seems to be a casual relationship between this growth of the cohort and CPI.- and if true in today's context, inflation should be rising over the next decade STRATEGY: Institutional investors buying Growth stocks disguised as EpicenterAs much as the Bloomberg article resonates with us (institutions avoiding Epicenter), we wrote yesterday how it seems like institutions are actually starting to nibble at Epicenter stocks.  - within the Epicenter sectors, about 1/4 of the stocks are also in the Russell 1000 Growth Index- in other words, about $922 billion of the $3.2T of pure Epicenter is Russell 1000 Growth ... Growth disguised as Epicenter outperforming since 3/24/2021The price performance of this Growth disguised as Epicenter has been particularly strong since 3/24/2021.  Take a look below:- Epicenter rose 20% 12/31 to 3/24 and Growth fell- Growth disguised as Epicenter outperformed Growth- Since 3/24/2021, Epicenter is up another 4.5%, similar to Growth- Growth disguised as Epicenter is up nearly 11% in that timeframeOne way to interpret this.  Growth investors are edging into Epicenter, by buying the Growth components of those indices.   ...12 Growth stocks disguised as EpicenterBelow are 12 stocks which are illustrative of the Growth stocks disguised as Epicenter and are also part of the S&P 500 High Beta ETF, which we have used as a proxy for the Epicenter trade.  Of the 12 names, half Cyclical Technology stocks (semis and semicap equipment). But notice that names like Wynn and even a REIT ($SPG) and insurance company ($LNC).  But you get the picture. Source: Fundstrat, Bloomberg $AMAT, $ENPH, $EXPE, $KLAC, $LNC, $LRCX, $MCHP, $PAYC, $SPG, $SYY, $TDG, $WYNN ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AN, GM, F, GRMN, LEG, TPX, TOL, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, DRI, SBUX, FL, GPS, KSS, LB, VFC, FITB, WTFC, ASB, BOH, FHN, FNB, PB, PBCT, RF, STL, TFC, WBS, PNFP, PACW, SBNY, NYCB, MTG, EVR, GS, IBKR, VIRT, BK, STT, SYF, BHF, AGCO, OC, ACM, WAB, EMR, GNRC, NVT, CSL, GE, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, TTC, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, UNP, JBHT, R, UBER, UHAL, LSTR, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, LYB, EXP, MLM, CF, MOS, ESI, NEU, NUE, RS, SON, IP, BXP, HIW, UDR, KIM, NNN, WRI, VNO, JBGS, RYNViolence in USA:Full stock list here --> Click here POINT 1: Daily COVID-19 cases 55,870, -2,243 vs 7D ago..._____________________________Current Trends -- COVID-19 cases: - Daily cases    55,870 vs 58,113 7D ago, down -2,243- 7D positivity rate   4.7% vs 4.9% 7D ago- Hospitalized patients   38,814  up +5.2% vs 7D ago- Daily deaths    608,  down -36% vs 7D ago_____________________________- The latest COVID-19 daily cases came in at 55,870, down -2,243 vs 7D ago.  - 7D delta in daily cases turned negative again. Unlike last Friday and Sunday, today's negative 7D delta is not likely a result of data distortion. However, it is also too early to conclude the decline in daily cases resumes.- The overall case trends remain stable. As the 7D average line (blue dash line in the 7D delta chart below) shows, the daily confirmed case figures have been stalled in the past three weeks.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments7D delta in daily cases has been flat-lined over the past 3 weeks...7D delta in daily cases turned negative again. Unlike last Friday and Sunday, today's negative 7D delta is not likely a result of data distortion. However, it is also too early to conclude the decline in daily cases resumes. The overall case trends remain stable. As the 7D average line (blue dash line) shows, the daily confirmed case figures have been stalled in the past three weeks.   Source: Fundstrat and state health departments    US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments  Source: Fundstrat and state health departmentsPOINT 2: VACCINE: 45 states near ~60% infected + vaccinated..._____________________________Current Trends -- Vaccinations: Vaccinations ramping steadily- avg 3.0 million this past week vs 2.8 million last week- overall, 18.9% fully vaccinated, 32.4% 1-dose+ received_____________________________Vaccination frontier update --> 45 states now near or above 60% combined penetration (vaccines + infections)Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity.  That is, the combined value of infections + vaccinations as % population > 60%.- Currently, 45 states (see below) are basically all at this level- SD, ND and RI are now above or near 90% combined penetration (vaccines + infections)- So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and FundstratCollectively, these 45 states represent about 94.1% of the US population.  As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and FundstratThere were a total of 1,396,975 doses administered on Monday, down 21% from 7D ago. However, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat ~73.2% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 15%/20%/25% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, almost all US states have seen 15% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 20% of its residents fully vaccinated, this figure is 27.6%. And only New Mexico and South Dakota have seen 25% of its residents fully vaccinated - 0.9% of US population.- While almost all US states have seen vaccine penetration >25%, 73.2% of them have seen 1 dose penetration >30% and only 16.5% of them have seen 1 dose penetration > 35%.- Almost all of the US has at least 15% of its residents fully vaccinated, However, only 27.6% of US has fully vaccinated >20%- This is still a small figure (15%/20% of residents fully vaccinated) but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days- this means 50 vaccines dosed for every 1 confirmed caseThis figure is rising nicely and likely surges in the coming weeks Source: CD and FundstratIn total, about 107 million Americans have received at least 1 dose of a vaccine.  This is a good pace and as we noted previously, implies 50% of the population by May.   Source: CDC and Fundstrat POINT 3:Tracking un-restricted and restriction-lifted states We are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates.  Keep in mind, easing/lifting restrictions can take multiple forms:- easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandatesSo there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CTGROUP 1:  States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states- that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions.  The dates are indicated on each chart.  The cases trends in these states have been mostly positive, with perhaps the exception of NY state:- NY state case levels seem awfully stubborn at these high levels- weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

COVID-19 UPDATE: MA shows vaccinations crushing COVID-19 cases (age>60)... Looks like institutional investors are starting to nibble on "Epicenter" stocks

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Looks like institutional investors starting to nibble on Epicenter stocksThe Easter weekend is going to throw off some of the COVID-19 data, as office closures created delays in reporting (7 states did not disclose Sunday but show up as 2X today).  So 7D avg are probably better insights vs daily cases vs 7D ago.  But a snapshot of the COVID-19 data is as follows:Current Trends -- COVID-19 cases: - Daily cases    66,183 vs 60,245 7D ago, up +5,938- 7D positivity rate   4.7% vs 5.0% 7D ago- Hospitalized patients   36,470  up +1.5% vs 7D ago- Daily deaths    619,  down -34% vs 7D agoVaccinations ramping steadily- avg 3.0 million this past week vs 2.7 million last week- overall, 18.7% fully vaccinated, 32.2% 1-dose+ receivedSo the overall picture is of daily cases flat/rising slightly while vaccinations are ramping up sharply.  And now about 32% of Americans have received 1-dose.  If I were to list the top 3 concerns regarding COVID-19 and the economy, based our firm's many convos over the past week, these are the 3 biggies:- COVID-19 cases are not improving (not surging) and raising some concerns about vaccine effectiveness- COVID-19 new mutations are being constantly identified, raising concerns about vaccine effectiveness- Congress is passing infrastructure (good) but also wants to raise corporate taxes (concern)MA shows that vaccinations are crushing COVID-19 cases... MA reports COVID-19 case figures by age group.  And looking at this breakdown, it is evident that vaccinations seem to be effective:- MA eligibility is age >60- Since Feb 1 to now, those age >60 have seen -67% to -88% decline in casesIn other words, only the non-vaccinated are seeing more cases in MA.  And given the population profile in MA is similar to rest of US, we can also infer that much of the case spread in the US is in the unvaccinated pool.  That is, those vaccinated are seeing a drop in confirmed cases.  This is a positive development. Since nearly the beginning of this pandemic, scientists have warned that COVID-19 virus would continue to mutate and given the mysteriousness of the disease, mutations only add further to the anxiety around defeating the virus.  The SF Chronicle today reported a 'double mutant' virus, which has features of both the CA variant and the Brazil (P.1).  This mutation was reported in CA.- thus, we can monitor CA case trends, which so far have been excellent, for signs that this double-mutant is evading vaccinations /local/article/Double-mutant-coronavirus-variant-surfaces-16076361. phpOur Head of Policy Strategy, Tom Block, wrote a lengthy piece about this pending infrastructure bill.  Please check out his research note on this.  I was surprised, but this infrastructure plan is a ton of real infrastructure projects, road, water quality, bridges, etc.  As Tom Block writes. These types of plans bring jobs to the district, so it strikes me as quite good for addressing the distress in this economy.  While GDP is recovering, millions of Americans are out of work and are facing desperate circumstances.  So a plan like this also seems to be coming at the right time.  - as for odds of passage, Tom Block sees a 75% chance this is passed by the Fall (see below)Per Tom Block, Policy Strategist for Fundstrat... The offset to this is the concerns that the plan also calls for an increase in the corporate tax rates, from 21% to 28%.  While there will be offsets, on the first cut, many of our clients cite this as an unequivocal negative.  I used to be an equity analyst, covering wireless stocks from 1993 to 2007. - in those years, many wireless companies did move domiciles or found other tax shelters, taking effective tax rates lower- In those 14 years, I never once changed my target price because of a change in effective tax ratesBefore you protest, consider the folly of comparing dividend yield to bond yield -- in a taxable world, it is a wrong comparison- dividends are taxed differently than interest income- 22% vs marginal income tax rateWhen was the last time someone explained that difference? Or used it to explain the relative value of stocks, after tax? See what I mean? In any case, Tom Block does think Congress has relatively more consensus on raising corporate tax rates, but the magnitude is not certain.  Axios is reporting that Sen. Joe Manchin, D-W. Va, opposes a corporate tax increase above 25% (vs 21% currently) which is below the 28% proposed.  And he said several other Democratic Senators similarly oppose.  My takeaway:- not full consensus to raise corporate tax rate- magnitude is unclear, and 25% sure feels like a flesh wound- raising corporate tax rates may not really impact equities (see above)In other words, I think it is too early to worry about rising corporate taxes as the driver for stock market sell-off.  Source: /manchin-biden-infrastructure-bill-corporate-tax-699f1255-794a-41e0-a7fa-8786ddb3cf79. htmlSTRATEGY: Looks like institutional investors are starting to nibble on Epicenter stocksMost institutional investors have not really yet tilted to Cyclical stocks yet.  I am not sure if this is a widely held view, but based upon our discussions with our clients over the past year, it is evident most of our clients prefer to Overweight Growth stocks and shy away from Epicenter aka Cyclicals.  They have many reasons for this ranging from I only want great biz to my mandate is Growth.  But for whatever reason, few institutional investors have embraced the Epicenter trade. One of the easiest ways to see this is to look at intraday charts.  Why?  Different constituents trade at different parts of the US session:- small traders/ retail often execute in the morning- European traders execute their trades near the European close ~11:30am ET- US institutional investors execute their trades at the end of the day- gamma hedging takes place at end of day too, so it amplifies institutional trendsThus, if a stock tends to be weak at the close, it is likely being sold by big money.  Vice versa. Epicenter stocks have been fading at the close since April 2020 and even since the start of the year... The tick charts for Epicenter stocks, using ETF SPHB as a proxy, as shown below for two different time periods:- April 2020 to 3/15/2021- Jan 1 2021 to 3/15/2021And as these chart both show, Epicenter has tended to fade into the close.  Interestingly, during 2020, the open was sold in Epicenter, meaning retail investors were dumping these stocks last year.  That is hardly a surprise given the pandemic.  But it is evident, retail and institutional investors were generally sellers.  - Was Europe the only buyer?  Hahahaha... maybe ... pattern has changed since 3/24/2021, and now Epicenter is closing strongerThe pattern since 3/24/2021 has actually changed.  Take a look below at two more recent timeframes:- 3/15 to 3/24, which is the timeframe the Russell 2000 saw a 10% decline- 3/24 to now, which is the past 10 daysNotice the abrupt change in how Epicenter stocks are trading throughout the session?- During 10% correction, institutions were shorting/selling Epicenter, accelerating into close- Since 3/24, price gains accelerate into the close.- Institutions finally seem to be nibbling at Epicenter stocksIn other words, it looks like institutional investors are now turning more constructive on Epicenter stocks.   We have written extensively about the fundamental arguments, ranging from:- likely positive surprise on operating leverage of Epicenter- likely positive surprise on revenues (demand) for Epicenter stocks- greatest leverage to US infrastructure- positive leverage to rising interest rates + inflation- underowned stocks- in short, Cyclicals become the new Growth stocks in a post-war periodIn other words, Epicenter stocks have multiple fundamental drivers of growth and positive surprise. ... Institutional investors raised cash balances 9%, +$241 billion, since start of year... And as a reminder, institutional investors have put a lot of cash on the sidelines since the start of the year.  Look at the parabolic rise.  And much of this was raised in the past two weeks.- we now have evidence this cash is nibbling at Epicenter stocks- this suggests lots more upside to Epicenter stocks in the coming monthsThe future, however, is uncertain. STRATEGY: 25 Power Epicenter Trifecta stock ideas (*)We are introducing a Power Epicenter Trifecta stock list.  This is designed to identify the strongest stocks within our Trifecta epicenter stock list. We essentially added a power rating to the stocks in the trifecta list to find stocks with the strongest price appreciation potential. Thus, the criteria for the Power Epicenter Trifecta is: Positive views  (i) Quant (tireless Ken),                        (ii) Global Portfolio Strategy (Brian Rauscher, aka Rocky) and                       (iii) Technicals.  Plus strong power rating:                        (i) trailing 1M return > 12M return                        (ii) outperformed S&P 500 past 6M (iii) price > 20D MAVG                        (iv) price > 50D MAVG Consumer Discretionary:RL, NCLH, RCL Financials:PBCT, NYCB Industrials:NVT, DAL, KEX Energy:XOM, HP, NOV, SLB, COP, EOG, MRO, MUR, HFC, PSX Real Estate:BXP, HIW, UDR, KIM, WRI, VNO, JBGS Source: Fundstrat, Bloomberg (*) the 25 Power Epicenter Trifecta stock ideas are the subset of the original 121 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 121 Epicenter Trifecta stock ideas, please Click Here. ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AN, GM, F, GRMN, LEG, TPX, TOL, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, DRI, SBUX, FL, GPS, KSS, LB, VFC, FITB, WTFC, ASB, BOH, FHN, FNB, PB, PBCT, RF, STL, TFC, WBS, PNFP, PACW, SBNY, NYCB, MTG, EVR, GS, IBKR, VIRT, BK, STT, SYF, BHF, AGCO, OC, ACM, WAB, EMR, GNRC, NVT, CSL, GE, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, TTC, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, UNP, JBHT, R, UBER, UHAL, LSTR, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, LYB, EXP, MLM, CF, MOS, ESI, NEU, NUE, RS, SON, IP, BXP, HIW, UDR, KIM, NNN, WRI, VNO, JBGS, RYNViolence in USA:Full stock list here --> Click here POINT 1: Daily COVID-19 cases 66,183, +5,938 vs 7D ago..._____________________________Current Trends -- COVID-19 cases: - Daily cases    66,183 vs 60,245 7D ago, up +5,938- 7D positivity rate   4.7% vs 5.0% 7D ago- Hospitalized patients   36,470  up +1.5% vs 7D ago- Daily deaths    619,  down -34% vs 7D ago_____________________________- The latest COVID-19 daily cases came in at 66,183, up +5,938 vs 7D ago.  - As we wrote yesterday, the COVID case data were distorted due to the holidays over the weekend. Not surprisingly, 7D delta in daily cases jumped back into the positive regime as the case data for many states are two-day or even three-day worth.- The overall case trends remain stable. As the 7D average line (blue dash line in the 7D delta chart below) shows, the daily confirmed case figures have been stalled in the past three weeks.- At this stage of pandemic, vaccinations might matter more than daily case trends. As long as vaccinations work, eventually the rollout of the vaccines will lead to a decline in the pervasiveness of the COVID pandemic. Source: Fundstrat and state health departments7D delta in daily cases is distorted by the holidays... As we wrote yesterday, the COVID case data were distorted due to the holidays over the weekend. Not surprisingly, 7D delta in daily cases jumped back into the positive regime as the case data for many states are two-day or even three-day worth. The overall case trends remain stable. As the 7D average line (blue dash line) shows, the daily confirmed case figures have been stalled in the past three weeks   Source: Fundstrat and state health departments   US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments  Source: Fundstrat and state health departments POINT 2: VACCINE: 45 states near ~60% infected + vaccinated..._____________________________Current Trends -- Vaccinations: Vaccinations ramping steadily- avg 3.0 million this past week vs 2.7 million last week- overall, 18.7% fully vaccinated, 32.2% 1-dose+ received_____________________________Vaccination frontier update --> 45 states now near or above 60% combined penetration (vaccines + infections)Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity.  That is, the combined value of infections + vaccinations as % population > 60%.- Currently, 45 states (see below) are basically all at this level- SD, ND and RI are now above or near 90% combined penetration (vaccines + infections)- So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and FundstratCollectively, these 45 states represent about 94.1% of the US population.  As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and FundstratThere were a total of 2,125,991 doses administered on Monday, down 9.2% from 7D ago. However, the pace is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat ~73.2% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 15%/20%/25% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, almost all US states have seen 15% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 20% of its residents fully vaccinated, this figure is 25.3%. And only New Mexico has seen 25% of its residents fully vaccinated - 0.6% of US population.- While almost all US states have seen vaccine penetration >25%, 73.2% of them have seen 1 dose penetration >30% and only 13.9% of them have seen 1 dose penetration > 35%.- Almost all of the US has at least 15% of its residents fully vaccinated, However, only 25.3% of US has fully vaccinated >20%- This is still a small figure (15%/20% of residents fully vaccinated) but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days- this means 50 vaccines dosed for every 1 confirmed caseThis figure is rising nicely and likely surges in the coming weeks Source: CD and FundstratIn total, about 107 million Americans have received at least 1 dose of a vaccine.  This is a good pace and as we noted previously, implies 50% of the population by May.   Source: CDC and FundstratPOINT 3:Tracking un-restricted and restriction-lifted statesWe are changing Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates.  Keep in mind, easing/lifting restrictions can take multiple forms:- easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandatesSo there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CTGROUP 1:  States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases.  - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states- that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions.  The dates are indicated on each chart.  The cases trends in these states have been mostly positive, with perhaps the exception of NY state:- NY state case levels seem awfully stubborn at these high levels- weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

FLASH: GBTC announces plans to convert to an ETF which should help close the -9% NAV premium gap

The largest U.S. exchange traded products, GBTC and ETHE, for the largest two crypto assets, Bitcoin and Ethereum, have been trading at a persistent discount to their NAV for a little over a month, with GBTC sitting around -9% and ETHE sitting around -5%.  Source: Bloomberg (Date: 4/5/2021) Much of the discount has been the result of investors expecting a U.S. listed Bitcoin ETF in the near future after the approval of several in Canada and the several recent ETF applications in the U.S.  Source: CNBC This morning, Grayscale Investments, the parent company of the products announced (Grayscale’s Intentions for a Bitcoin ETF) that it planned to convert its GBTC product into an ETF when possible.  Source: Medium We think this is a very positive move for Grayscale to maintain its position as a leader as the largest listed Bitcoin product and this announcement should help close the negative premium gap.  Grayscale has been giving the market hints towards this decision for the last month. We wrote on 3/10 how we thought the discount could be temporary after Grayscale announced plans to purchase up to $250M of GBTC shares.   Source: Businesswire  The announcement does not guarantee that the price of GBTC will converge with its NAV, as it will still be set by supply and demand until the fund is one day (if ever) converted to an ETF. But we think the timing of the announcement will be very positive for price of GBTC to instill market confidence ahead of the unlocking of a large nearly $5B worth of shares in the coming months.  Source: Bloomberg, TheSkyhopper  We think ETHE could see its -5% discount improve as well on the news which could also benefit the ETH price.  We think this announcement could have the following implications: 1. Relieve selling pressure on GBTC shares2. Relieve BTC spot selling pressure from investors playing the arb trade the other way3. It may reenergize demand for BTC from investors willing to contribute to the GBTC trust again4. We think ETHE could see its -5% discount improve as well on the news We view all of these as very very bullish. Source: Bloomberg, Fundstrat Bottom line: The announcement is positive for GBTC and ETHE, Bitcoin and Ethereum, as well as crypto flows in general – we remain bullish on the asset class over the balance of the year.

COVID-19 UPDATE: Daily vaccinations now 45X daily cases = way ahead. Conditions in place for a significant rally to continue into April led by Small-caps + Energy + Epicenter

Click HERE to access the FSInsight COVID-19 Daily Chartbook. We are shifting to a 4-day a week publication schedule: MondayTuesdayWednesdaySKIP THURSDAYFriday STRATEGY: Moving into 2Q2021, leadership intact = Small-caps + Energy + EpicenterThe daily confirmed case figures for COVID-19 have stalled in the past few weeks, stabilizing ~50k-60k per day. Taking a step back, today, vaccinations might matter more than daily case trends. Why? Take a look below: - Daily vaccinations are 45X daily confirmed cases- Hence, for every confirmed case, there are now 45 Americans vaccinated- As long as vaccinations work (which evidence suggest this), trends in vaccinations > daily case trends In other words, vaccinations are a leading indicator.- vaccinations create cumulative benefit (penetration)- vaccinations take 30 days to be fully effective (takes time) Thus, as long as the US has this prodigious ratio of vaccinations to cases, this is pointing to a future decline in the pervasiveness of the COVID-19 pandemic. In addition, we continue to believe the combined ratio of vaccinations + recovered infected is informative in understanding a community's potential herd immunity. - Daily cases came in at ~37,000 but 7 states did not report (Easter Sunday). So I would not give it much weight. Source: Fundstrat, CDC and state healthcare websites In fact, the best evidence that US COVID-19 progress is improving is recent actions taken by policy makers. Take a look at the news over the weekend: - CA is easing restrictions on outdoor concerts, sports and theme parts starting April 1st. - CDC says fully vaccinated people can resume travel at 'low risk' The California announcement is particularly salient. After all, this state is among the most restrictive and conservative regarding resident mobility. And to open these venues is a major step. Source: /2021/04/01/as-california-expands-covid-19-vaccine-eligibility-to-all-californians-50-governor-newsom-receives-vaccine-in-los-angeles/ And the CDC on Friday said that fully vaccinated Americans can travel at low risk. Again, this is an impressive incremental step forward. More than 30% of US adults have received at least one dose and within 30 days, this will likely be >40%. Thus, as we move forward, the percentage of Americans that this CDC guideline applies to will continue to rise in the next few months. Again, incremental progress. /2021/04/02/fully-vaccinated-people-can-resume-travel-at-low-risk-cdc-says. html?__source=iosappshare%7Ccom. slack. slackmdm. share STRATEGY: Conditions in place for a significant rally to continue into AprilLast week, we posited that a significant rally would start Wednesday morning (last week) and if such a rally happened, this would continue into April. With the strong March jobs report (which came out Friday, when markets were closed), we believe conditions are in place for this to continue. We realize 1Q2021 was a choppy quarter for markets (except for Epicenter stocks which rallied nicely). And I thought it would make sense to do a status check of key factors now compared to the start of 2021: 1. Economic outlook is stronger vs start of year. March jobs report 916k latest example 2. The vaccine rollout ahead of consensus and White House targets with nearly 3.0 million per day now 3. Equity markets endured 3 market extinction events, but these only proved to be rolling corrections, no lasting damage. 4. Institutional investors are even more cautious now. Institutional cash balances now $3.0T vs $2.764T at start of year, or 9% higher (+$241 billon). On that last point. Wow. That is a dramatic increase. Pretty shocking rise in institutional money market cash balances = investors not bullish... The weekly increase in institutional money market cash is shown below (past 6M) and you can see the parabolic rise in the last two weeks. In other words, in the second half of March 2021, institutions got quite cautious. - total institutional money market cash is $3.0T now, the highest since June 2020- retail money market cash is $1.5T Total cash on sidelines is $4.5T = tons and tons of firepower on the sidelines. This bodes well for April equity gains. Leadership intact, led by Small-caps and Energy and EpicenterAs we look into 2Q2021 leadership, we believe the leadership of 1Q2021 will continue. In this case, this means leadership of: - small-caps (Russell 2000) which is the best performing major index- Energy, up 31% in 1Q2021- Epicenter stocks aka Cyclicals ... only 7 prior times a major sector rose 30% in 1Q of a calendar year... Energy stands out because the sector rose a meteoric 31% in 1Q2021. In speaking with our clients, many are viewing the move in Energy as a dead cat bounce or a fluke. And thus, do not see the potential for follow through the rest of the year. History actually says otherwise. Since 1928, there have only been 7 instances of a major sector rising 30% in a quarter (we exclude REITs which did not exist prior to 2000 and was a volatile real estate sector). - 7 of 7 times, the sector continued to outperform April 1 to YE- average further gain was 12%- most of the time, the sector continues to be top quartile of sectors In other words, history says a 30% move is extremely unusual. And such a move tends to signal further gains into the rest of the year. 2Q2021 set-up seems to favor economic re-opening = small-caps + Energy + Epicenter stocksBut more broadly, we think the fundamental backdrop remains supportive of overweighting cyclical stocks. Recall that Cyclicals are only 33% of the S&P 500 overall weight and more than 60% of the Russell 2000 index. So if Cyclicals aka Epicenter work, small-cap stocks will outperform. But here are the conditions to consider: - Economic momentum is strengthening- Pent-up consumer demand + liquid consumer bank accounts- 1Q2021 earnings season starts soon and we expect a lot of positive visibility commentary- Cyclicals have proven to be prodigious cost cutters during downturns and this cycle could be amplified operating leverage- Our work shows that EBIT for Cyclicals could be 117% above 2019 levels by 2022- Wow (reaction to above)- Cyclicals are least consensus among the buyside So you can see, that the case for Cyclicals is fundamentally attractive and has the most capacity to positively surprise. ... DeMark charts are showing uptrends underway in Small-caps and Energy... Additionally, the technical picture, as evidenced by DeMark charts, has turned positive for small-caps and for Energy. If S&P 500 Energy sector (ETF proxy is XLE) clears $50.50 (currently $50.31), a move to $53.24 could happen within a few weeks. This is a 6% rise and a strong continuation of the 31% gains seen in 1Q2021. Source: Bloomberg and Fundstrat and DeMark Analytics The oilfield services sector (ETF proxy OIH) is also in a new uptrend as well. And the DeMark implied target (combo count v1b) is $216, or +10%. In other words, if one is looking for the greatest upside within the Energy sector over the next few weeks, OIH, is where the strongest upside seems to exist. Source: Bloomberg and Fundstrat and DeMark Analytics And IWM, the ETF for the Russell 2000, has commenced a new uptrend. And the near-term target is the prior all-time highs of $237.40. This is 6% upside. Source: Bloomberg and Fundstrat and DeMark Analytics Keep in mind, these are simply illustrations of the technicals and not a guarantee. But as those charts show, these ETFs seem to have positive risk/reward to revisit substantial upside and soon all-time new highs. STRATEGY: 25 Power Epicenter Trifecta stock ideas (*)We are introducing a Power Epicenter Trifecta stock list.  This is designed to identify the strongest stocks within our Trifecta epicenter stock list. We essentially added a power rating to the stocks in the trifecta list to find stocks with the strongest price appreciation potential. Thus, the criteria for the Power Epicenter Trifecta is: Positive views  (i) Quant (tireless Ken),                        (ii) Global Portfolio Strategy (Brian Rauscher, aka Rocky) and                       (iii) Technicals.  Plus strong power rating:                        (i) trailing 1M return > 12M return                        (ii) outperformed S&P 500 past 6M (iii) price > 20D MAVG                        (iv) price > 50D MAVG Consumer Discretionary:RL, NCLH, RCL Financials:PBCT, NYCB Industrials:NVT, DAL, KEX Energy:XOM, HP, NOV, SLB, COP, EOG, MRO, MUR, HFC, PSX Real Estate:BXP, HIW, UDR, KIM, WRI, VNO, JBGS Source: Fundstrat, Bloomberg (*) the 25 Power Epicenter Trifecta stock ideas are the subset of the original 121 Epicenter Trifecta stock list. For the full list of our original Epicenter Trifecta stock list, please click the link below. Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile. For the full list of the 121 Epicenter Trifecta stock ideas, please Click Here. ADDENDUM: We are attaching the stock lists for our 3 portfolios:We get several requests to give the updated list for our stock portfolios.  We are including the links here: - Granny Shots  -->       core stocks, based on 6 thematic/tactical portfolios- Trifecta epicenter  --> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Technicals- Violence in USA --> companies that are involved in some aspect of home or personal security. We are not recommending these stocks, but rather, bringing these stocks to your attention. Granny Shots:Full stock list here --> Click hereTickers: AAPL, CSCO, INTC, MXIM, NVDA, EBAY, KLAC, GRMN, GOOG, MNST, MSFT, AMZN, QCOM, TSLA, PYPL, AXP, BF/B, PM, XLNX, TGT, PG, XOM, VLO, GL, RF, ATVI, BBY, GE, AMAT, LRCX, MU, HPQ Trifecta Epicenter (*):Full stock list here --> Click hereTickers: AN, GM, F, GRMN, LEG, TPX, TOL, NWL, MAT, PII, RL, MGM, HLT, MAR, NCLH, RCL, WH, TNL, SIX, DRI, SBUX, FL, GPS, KSS, LB, VFC, FITB, WTFC, ASB, BOH, FHN, FNB, PB, PBCT, RF, STL, TFC, WBS, PNFP, PACW, SBNY, NYCB, MTG, EVR, GS, IBKR, VIRT, BK, STT, SYF, BHF, AGCO, OC, ACM, WAB, EMR, GNRC, NVT, CSL, GE, IEX, PNR, CFX, DOV, MIDD, SNA, XYL, FLS, EAF, TTC, ITT, ALK, DAL, JBLU, LUV, MIC, KEX, UNP, JBHT, R, UBER, UHAL, LSTR, MAN, XOM, HP, BKR, HAL, NOV, SLB, COP, EOG, FANG, HES, MRO, MUR, PXD, XEC, HFC, MPC, PSX, LYB, EXP, MLM, CF, MOS, ESI, NEU, NUE, RS, SON, IP, BXP, HIW, UDR, KIM, NNN, WRI, VNO, JBGS, RYNViolence in USA:Full stock list here --> Click here POINT 1: Daily COVID-19 cases 37,238, -6,790 vs 7D ago... _____________________________ Current Trends -- COVID-19 cases:- Daily cases 37,238 vs 44,028 7D ago, down -6,790- 7D positivity rate 4.8% vs 4.8% 7D ago- Hospitalized patients 36,362 up +3.5% vs 7D ago- Daily deaths 643, down -34.7% vs 7D ago_____________________________ - The latest COVID-19 daily cases came in at 37,238, down -6,790 vs 7D ago.- 7D delta in daily cases turned negative last Friday and yesterday. However, it was primarily because in observance of the holidays, several states were not reporting/updating their COVID dashboard.- On Sunday, 7 states were not reporting: MN, LA, KY, OH, SC, SD, MA Source: Fundstrat and state health departments 7D delta in daily cases is distorted by the holidays... 7D delta in daily cases turned negative last Friday and yesterday. However, it was primarily because in observance of the holidays, several states were not reporting/updating their COVID dashboard. On Sunday, 7 states were not reporting: MN, LA, KY, OH, SC, SD, MA Source: Fundstrat and state health departments US hospitalization still rolling over ... and even US deaths seem to be rolling over... Below we show the aggregate patients who are currently hospitalized due to COVID. It has fallen significantly from the wave 3 peak. Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments Source: Fundstrat and state health departments POINT 2: VACCINE: 45 states (+4 from Thursday) near ~60% infected + vaccinated... _____________________________ Current Trends -- Vaccinations: Vaccinations ramping steadily - avg 3.1 million this past week vs 2.7 million last week - overall, 18.4% fully vaccinated, 31.8% 1-dose+ received _____________________________ Vaccination frontier update --> 45 states now near or above 60% combined penetration (vaccines + infections) Below we sorted the states by the combined penetration (vaccinations + infections). As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity. That is, the combined value of infections + vaccinations as % population > 60%. - Currently, 45 states (see below) are basically all at this level - SD, ND and RI are now above or near 90% combined penetration (vaccines + infections) - So slowly, the US is getting to that threshold of presumable herd immunity Source: CDC and Fundstrat Collectively, these 45 states represent about 94.1% of the US population. As the chart below highlights, the US is seeing steady forward progress and this figure continues to rise steadily. Source: CDC and Fundstrat There were a total of 3,350,925 doses administered on Sunday, up 2.5% from 7D ago. The pace overall is steadily rising, as evidenced by the 7D moving average (see blue line). Source: CDC and Fundstrat ~72.3% of the US has seen 1-dose penetration >30%... To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 10%/15%/20% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, almost all US states have seen 15% of their residents fully vaccinated. However, when looking at the percentage of the US with at least 20% of its residents fully vaccinated, this figure is 23.9%. And only New Mexico has seen 25% of its residents fully vaccinated - 0.6% of US population. - While almost all US states have seen vaccine penetration >25%, 72.3% of them have seen 1 dose penetration >30% and only 8.3% of them have seen 1 dose penetration > 35%. - Almost all of the US has at least 15% of its residents fully vaccinated, However, only 23.9% of US has fully vaccinated >20% - This is still a small figure (15%/20% of residents fully vaccinated) but this figure is rising sharply now. This figure could rise even more rapidly after the JNJ's 1-dose vaccines roll out. Source: CDC and Fundstrat This is the state by state data below, showing information for states with one dose and for those with two doses. Source: CDC and Fundstrat The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg) and this is the most encouraging statistic. - the 7D moving average is about ~50 for the past few days - this means 50 vaccines dosed for every 1 confirmed case This figure is rising nicely and likely surges in the coming weeks Source: CD and Fundstrat In total, about 105 million Americans have received at least 1 dose of a vaccine. This is a good pace and as we noted previously, implies 50% of the population by May. Source: CDC and Fundstrat POINT 3:Tracking un-restricted and restriction-lifted statesWe changed Point #3 to focus primarily on tracking the lifting of restrictions, as states begin to ease various mandates. Keep in mind, easing/lifting restrictions can take multiple forms: - easing indoor capacity- opening theaters, gyms, salons, saloons- eliminating capacity restrictions- eliminating mask mandates So there is a spectrum of approaches. Our team is listing 3 tiers of states and these are shown below. - states that eased in 2020: AK, OK, MO, FL, TN- states that eased start 2021 to now: SD, ND, NB, ID, MT, IA, NC, MS, SC, AZ, TX, MD- states that announced future easing dates: GA, NY, WI, AR, CA, AL, CT GROUP 1: States that eased restrictions in 2020... The daily case trends in these states is impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. Rather, the case trends in these states look like other states. GROUP 2: States that eased restrictions in 2021 to now... Similar to the list of states above, the daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases. - we have previously written about how ND and SD, in particular, have seen an utter obliteration of COVID-19 cases in those states - that seems to be a function of vaccine penetration + infection penetration, leading to something akin to herd immunity GROUP 3: States that announced plans ease restrictions in 2021... These states have upcoming dates to ease restrictions. The dates are indicated on each chart. The cases trends in these states have been mostly positive, with perhaps the exception of NY state: - NY state case levels seem awfully stubborn at these high levels - weather is improving in NY area, so if weather has any effect on virus transmission, it should slow cases

FSInsight logo
150 East 52nd St, 3rd Floor, New York, NY 10022

Subscribe to our Free Weekly Report

An insitutional-grade report delivered to your inbox every week.

© 2021 FSInsight. All rights reserved. Developed by HANGAR115.

Illustrations by Karl Wimer.