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COVID-19 remains a global crisis and we realize that many people need to keep up with COVID-19 developments, particularly since we are moving into the more critical stage ("restart economy"), so feel free to share our commentary to anyone who has interest.

The developments over the weekend have been mostly positive.  Most notably, it looks like the improvements for NY state have been sustained sufficiently for Gov Cuomo to mention that some parts of the state may open after May 15th.  This is quite a milestone.  Now the phased opening would be for manufacturing and construction and more likely in Upstate and Central NY.  Not NYC at this time.   NYC with >18,000 cases per 1mm residents did 3X worse than Lombardy, Italy (see chart below).  Recall, Italy was the first developed nation to see a COVID-19 outbreak, and the northern region was overwhelmed.  Yet, NYC managed to see confirmed case prevalence 3X worse than Lombardy.

But the other development over the past few days has been a significant increase in US testing to about 300,000 per day, 3X what it was just a week ago.  And this figure could surge in the coming weeks as more testing capabilities and capacity are added.  But the consequence of this is "confirmed cases" are surging.  Over the weekend, the US reported 35,780 net new cases (4/25/2020) which exceed the 34,298 high on 4/10/2020.  

We had several clients email over the weekend asking if a new wave of cases is taking place.  But as we discuss below, this surge is due to 3X rise in tests, and in fact, NY state accounts for almost half of the surge.  And NY is certainly not getting worse, because Gov. Cuomo is advancing the timeline.

And as for equity markets, we continue to believe HY is a leading indicator of risk appetite.  HY managed to price $20.6 billion in bonds last week (2nd highest EVER for that market) and saw $2.2 billion of inflows.  All of this despite the catastrophic crash in May WTI futures (20% of HY is energy).  The fact that HY was only modestly "nicked" by the oil armageddon should be a clue.

We believe HY is underscoring the fact that the balance of power in risky assets, and stocks, has shifted into the hands of buyers ("half full").  And the market is telling us that stocks/EPS recovery likely follows a path that is a lot steeper than consensus expects (we will have more insights over the coming week). 



POINT #1: Governor Cuomo looks like he is advancing timeline to re-open NY State to sometime after May 15th...
Governor Cuomo even advanced the timetable to re-open NY state, sometime after May 15th with upstate and central NY first
In his press briefing today, Governor Cuomo talked about how NY state continues to make good progress, sufficiently, actually that the state is somewhat advancing the timeline to re-open NY state.  Cuomo advanced the timetable for a phase re-opening of NY state, to sometime after mid-May with Upstate and Central opening before NYC. 

- the first phase is to resume construction and manufacturing jobs.
- the second phase, open additional "essential businesses" 
- 14 days would separate the two.
- Schools would need to re-open if NY is going to have large-scale re-opening.  Schools may have "summer sessions" to make up for the lost time.

In each case, the organizations/entities need to create mitigation plans that meet the state requirements (not yet set).

COVID-19 update: NY Gov. Cuomo advances the timeline to re-open. Testing 3x = cases up. HY issuance 2nd strongest week ever
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