COVID-19 UPDATE: US cases rise slightly due to NY, NJ, CT and IL (not newly opened states) and looks like "open" states TX and GA residents are leaving homes.

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.


While there is no playbook for navigating a pandemic, or at least we do not have a playbook (as we stated several times over past few months), as states begin to ease restrictions, it will be important to track two dynamics: first, what activities states are “easing” and second, the willingness of residents to re-engage.  Our data science team, led by tireless Ken, categorized state “easing” into 6 categories (elective surgeries, etc) and also compiled some high-frequency analytics to track “re-engagement” of some of these.  Like we said, there is no playbook, so if you have suggestions or ideas, we welcome them.

So far 26 states are in some state of “open” representing 58% of US GDP.  But state governments have limited what activities are open or set dates for easing into the future.  And it seems like states have prioritized “business” and “healthcare” over “retail” — this is not surprising since the two formers are larger contributors to the tax base (asset owners), even as they are smaller shares of employment. 

– 19 states have allowed elective surgeries (34% GDP) — this might be more as some states like NY are doing phases of easing of this.
– 18 allowed manufacturing (27% GDP) to resume/ or workers who cannot “telecommute” back to the office
– 14 allowed (24%) “dine-in” of some form (outdoor seating, or indoor, like Georgia)

More of this is discussed below.  And some of the early results show residents are re-engaging.  There is a pronounced drop in “stay at home” in Georgia (open since 4/24/2020) and Texas (open since 5/1) but Texas shows residents started leaving home since 4/1.  But more interesting, we can pronounced trends back to work sites (per Google Analytics) in these states.  We will expand our framework and analysis over time.  But we are just introducing it today.

The USA COVID-19 case data today showed +2,323 more cases to 27,350 from 25,027–but don’t worry.  It is not new infections in open states.  It is the chronic 4 — NY, NJ, CT and IL account for 1,939 of the 2,323 rise.

As for economic data, the April employment report is released Friday 5/8/2020 and it will be the worst employment report in the history of modern civilization and for any country.  Consensus is looking for 22 million jobs lost in April, on top of the 700k in March and this is largely foretold by the 30mm-plus jobless claims.  This only underscores how devastating this pandemic has been — both on lives lost and carnage to the economy.



POINT #1:  US COVID-19 cases rise 27,350 vs 25,027 (+2,323) due to “chronic 4” NY, CT, NJ and IL not “open states” like TX, GA…Total US COVID-19 cases rose today by +2,323 to 27,350 from 25,027.  This is a pretty sizable jump but when looking at the composition of states adding to the rise, it is really from 4 states, of which 3 of the 4 have been “chronic” case risers. 

Source: COVID-19 Tracking Project + Johns Hopkins


The states reporting increases are “closed” states and with chronic high case counts… NY, NJ, IL and CT

The 4 states are:

– NY  3,491  vs  2,786    +705
– NJ   1,745  vs 1,297    +448
– CT     789  vs    374     +415
– IL     2,641 vs  2,270    +371
4 state 1D delta          +1,939


In other words, these 4 accounted for almost all of the 1D gain.  So the rise in the past day is not an “re-infection” wave due to open states.  The cases for GA and TX were actually flat today (see below).  But daily case counts in the US have this cadence of volatility and somewhat stubborn to decline.  But at the moment,  the rise in the past few days seems more due to testing lags within a state — rather than a new breakout.

For NY state to see a rise in cases today, it was not even addressed in NY Gov Cuomo’s daily press briefing.

Source: COVID-19 tracking project + Johns Hopkins

NY state, incidentally, continues to see improvements in healthcare resource utilization.  Both “new” hospitalizations (dashed line)  and “net” hospitalizations (columns, and is net of discharges) have been trending down. At the peak, NY state was seeing +3,500 admissions per day and this figure is now 613 in the latest day. So it is down sharply.

Source: NY Dept of Health

NY tested 27,000 healthcare workers in “downstate” NY (Westchester, NYC) for COVID-19 and surprisingly low prevalence…
NY recently tested 27,000 healthcare workers in 25 “downstate” facilities to see the prevalence of COVID-19 among these workers.  This is really useful.  The frontline for this crisis is the hospital and healthcare worker.  They are not getting enough credit for the risks they take.  In fact, I know I have not acknowledged this and there are many doctors in my family among my cousins (my Dad retired many years ago).  So this is a personal issue for me as well.  These were serological tests.

There were several reasons Cuomo wanted to conduct this test:
– assess the risk to the resiliency of the healthcare system (if a lot of healthcare workers get sick = disaster)
– assess the value of using PPE, gloves and sanitizers

The prevalence (based on antibodies) is much lower in healthcare workers vs the population of the areas tested.
– Westchester –> 6.8% (HC worker) vs 13.8% population
– NYC –> 12.2% vs 19.9%

We realize this can be interpreted in two ways.  On an absolute level, it is scary that 12.2% of NYC healthcare workers have COVID-19 antibodies because it is 1 in 9. 

But consider the viral load these healthcare workers are exposed to.  These workers spend 100% of their workday in an environment with sick patients and in close contact with COVID-19 positive.  The fact that the prevalence is lower is evidence that in 100% interaction with an exposed cohort and in close contact, the PPE, masks, sanitizers and gloves mitigate transmission.

POINT #2: Breaking “phased” openings into 6 categories.  Biz > dining.  +18 open for manufacturing/offices and +15 restaurants
Our data scientist, tireless Ken, expanded the details of 26 states which announced some sort of phased opening, adding 6 categories.  Ken scrapes data from news, state sites and twitter, and if you happen to find an error or are aware of additional information, please send it our way.  We appreciate the assistance.

The 6 categories he added are, the date of opening of:
– manufacturing/offices (not always the same, but standardizes “wholesale” / non-retail workforce)
– daycare + elective surgeries (which for most states are treated in same category)
– dine-in restaurants (either outdoor seating,  curbside or dine-in)
– retail (broadly defined and includes malls.  Some states are treating “malls” separately)
– bars
– gyms and other services (hair salons, tattoo parlors)

Based on number of states easing, it looks like governments are prioritizing elective surgeries (19) and manufacturing (18) over dining (14) and this makes sense.  The larger contributors and tax base for these states is from healthcare and offices, rather than restaurants.

Source: State govt websites and Fundstrat


The states are taking very different approaches for the sequence of the 6 above and many have “TBD” (to be determined) for these categories.  The summary is below and is sorted by the date of “announced” opening (earliest on top).  There are 3 states at the very bottom of the table that never issued “stay at home” orders –> Arkansas, North Dakota and South Dakota.  And for the sake of simplicity, we treat their openings as of 3/15/2020.

Source: State govt websites and Fundstrat


Looking at aggregate share that “dine-in restaurant” and “office/manufacturing” is re-started…One way to use the above table is to look at what percent of each category is re-started/open both in number of states and percent of US GDP.  These are what Alan Greenspan would call “blunt instruments” because we are not able to be precise in what overall share of each activity is indeed open and it is simply estimated by the state’s GDP share.  


But we believe this framework will give a situational awareness to the extent lockdown restrictions are loosened.  


Restaurants: “Confirmed open” is 11 states and 22% of GDP as of today… but set to rise in coming daysWe included future dates, to the extent a state has announced the easing of restrictions.  And for restaurants, we show # states and the % of US GDP (as a proxy for US overall). 

– 14 (including 3 that never issued stay at home) states are easing “dine-in” restrictions
– this is 22% of US GDP, or roughly 22% of US restaurants are dine-in.

Source: State govt websites and Fundstrat

The sorting of the data by state is shown below.  And in the next 2 weeks, another 3 states will be adding “dine-in” easing.

Source: State govt websites and Fundstrat



Manufacturing/ Offices:  Confirmed “resume” is 18 states and 24% of GDP — prioritizing manufacturing over restaurants
The manufacturing facilities/ offices open is shown below.  As we noted already, some states eased manufacturing and some eased “office” workers who cannot “telecommute” — thus, this is a gross oversimplification.  But too detail and we lose sight of the larger picture.  But again, we welcome suggestions so we can calibrate our analytics.

– 18 (including 3 that never issued stay at home) have eased restrictions
– this is 24% of US, based on the state GDP share.

This is slightly higher than the “dine-in” states (by +3) and shows states are prioritizing manufacturing over restaurants.

Source: State govt websites and Fundstrat


The sorting of the data by state is shown below.  And in the next 2 weeks, another 4 states will be adding “manufacturing” easing.

Source: State govt websites and Fundstrat


POINT #3: As States ease restrictions, are people venturing out? Big data –> Open Table, MTI traffic, Google/location tracking.
Using Georgia (2 weeks) and Texas (1 week) as examples…Once a state is open, the next obvious question is whether demand has resumed.  Most states are only in the earliest stages of re-start. So we picked 2 states (of the 26) to highlight some ways to track the progress of the state of consumer activity.  Additionally, there are many ways to track the progress of consumer/resident re-engagement, but we selected 3 metrics to provide some framework:

– % users staying at home, based on data from the MTI (Maryland Transportations Institute)
– Dine-in reservations based on data from Open Table
– % residents heading to work based on Google mobility data


Georgia — open since 4/24/2020… dining since 4/27/2020George is one of the first states to ease restrictions (#6 by our count, see above) and eased dining on 4/27/2020.  So it has been a few weeks.  With 14-plus days of easing, we can see how patterns have changed.
To track “% staying at home” we use data from University of Maryland (Maryland Transportation Institute (2020). University of Maryland COVID-19 Impact Analysis Platform, https://data.covid.umd.edu, accessed on 5/7/2020, University of Maryland, College Park, USA.) and they have pretty detailed information.

As shown, since the re-open date, the percent staying at home has fallen further.  These figures show less than 30% were exclusive stay at home already, but has since falling by another 500bp to under 25%.

Source: Maryland Transportation Institute (2020). University of Maryland COVID-19 Impact Analysis Platform, https://data.covid.umd.edu, accessed on 5/7/2020, University of Maryland, College Park, USA.

Georgia dining is real “in house” dining. Sitting at a table.  One of our clients is based in Atlanta and he sent us this email (see below).  In Atlanta, one sits down without a mask.  The wait staff is wearing PPE.  And it sounds like restaurants are quite busy!

Data from Open Table shows a rise in dine-in reservations since the easing of dining restrictions.   From -100%, this figure is up less than 10%, but as you can see, it is an uptick nonetheless.

Source: OpenTable

For movement back to the office, we used Google analytics and we can see a more pronounced uptrend in visits to manufacturing and offices below.  Thus, it looks like residents are heading to offices and leaving home.  And dining is recovering but more modestly.

Source: Google



Texas shows residents were already easing restrictions before the state “officially eased”…Texas has been open for the past week so there are basically no plots past “vertical” line.  Yet, the percent of Texans staying at home peaked a month earlier.  This is a case where it seems the residents were ahead of the state.

And as we noted above, Texas has seen daily cases FALL in April.  So the state’s residents have been a lot more mobile (over 70% in the past month) and yet cases were falling.

Source: Maryland Transportation Institute (2020). University of Maryland COVID-19 Impact Analysis Platform, https://data.covid.umd.edu, accessed on 5/7/2020, University of Maryland, College Park, USA.

But since the restrictions were lifted, we see a very pronounced rise in dining reservations.  Much more so than what we saw in Atlanta.  For our clients based in Texas, please share with us any anecdotes you have.  It looks like Texans have embraced easing of restrictions more readily.

Source: OpenTable

And like “stay at home” it looks like Texas jumped right back to work.  The trend has been pronounced higher since the easing of restrictions.

Source: Google


STRATEGY: April jobs report to be the “worst” in the entire history of the United States.  If stocks survive this, this gives new meaning to markets bottom on “bad news” Friday (today) will be the April US employment report and Street consensus is -22 million jobs lost. This will be the single worst monthly job loss in the history of the entire world and in the entire history of modern civilization. 

That is how utterly devastating this pandemic has been, to both the healthcare crisis (4mm cases worldwide) and to the global economy.  So it is nothing to be taken lightly.  But the fact this jobs report will be this terrible has been well telegraphed.  Every US weekly jobless claims report has shown this and those have totaled 30 million since early February.  

Employment losses > income losses…
The March employment report was already a catastrophic loss of 713,000 jobs.  But what the March report highlighted was the employment losses were much greater than the “personal income” losses as the median income of the jobs lost was $35,000 vs $63,000 US median overall.  And the St Louis Fed consumption study showed the 30% UE would lead to a 3.5% personal consumption loss, so it came to a similar conclusion.

– the key for the April jobs report is tracking the median income hit based on the industries impacted.

We are moving into the 2nd and 3rd wave of this crisis (they overlap) which is the economic channels.  First, is the “social distance” victims and the second order-plus are the asset owners.  The asset owners are going to be taking a hit as well.  In fact, Gov Cuomo extended the rent moratorium until August.  So landlords in NY state are facing a serious cash flow mismatch.

From a strategy perspective, we continue to believe the market is now in the hands of “buyers” as the entire universe became sellers in March.  The future is uncertain, so we are not certain of anything.  And as such, our framework is as follows:

– Stock recoveries are symmetric to their decline, 2.5X time to make a new high vs decline
– Stocks follow bonds and HY/IG markets are essentially functioning normally
– EPS recovers faster than GDP due to companies ability to engineer costs aka operating leverage
– Two largest costs for biz today are –> employees and real estate and WFH is letting biz realize how to engineer costs
– Policy reaction of the White House and Fed providing cushion

This framework above makes us buyers of the market. And our Head of Global Portfolio Strategy, Brian Rauscher, expects markets to make new highs before YE (one of his 2H2020 surprises).

We continue to recommend investors barbell this market. Own “secular growth” (FANG, Tech, Cloud) and “epicenter” stocks like Consumer Discretionary.

Source: Fundstrat