Merch Store

COVID-19 UPDATE: Daily cases rise over weekend, yet hospitalizations + death in persistent downtrend (both 90% down from peak). Past 4 US pandemics saw vaccines developed 4-9 months, vs 12-18 expected for COVID-19. 32 Epicenter stock ideas.

In the US, today is Father's Day.  The holiday originated in Spokane, WA at the YMCA in 1910 by Sonora Smart Dodd, who herself was born in Arkansas.  Her father was a Civil War veteran and a single parent who raised 6 kids.  So, Happy Father's Day to everyone who is a parent, has a parent (or knows a parent).

The improving narrative around COVID-19 has been setback because many states in the US are seeing a rise in cases.  There has been some alarm raised recently given the rise in US COVID-19 cases.  In fact, cases have also risen in Western Europe (Germany, see below).  But cases alone is not the reason to be wary -- it is the risk that cases drive hospitalizations, which drive ICUs/deaths and therefore, further health and economic tragedy.

Notably, the states seeing sustained rises in cases are not seeing a proportionate rise in healthcare utilization (hospitalization rate) -- Texas, Florida, Arizona, California, Utah and to a decreasing extent, Arkansas (looks like it has already peaked).  This continues to be the case, even for states like California.

And while some see this as an indictment of state openings, the timeline for the case increases is more consistent with the nationwide protests (>3 weeks now), rather than economic re-opening.  6 states account for 94% increase in cases over the past week --> TX, FL, AZ, CA, OK and Iowa.  Hence, why would closing the states be the solution? Mitigation steps certainly need to be taken, but among the menu of options, closing a state seems the least likely.  Even Germany, which is seeing its R0 surge to 2.9 is not planning to rollback any easing of restrictions (see below).

As markets focus on 2H2020, we thought it would be useful to take quick stock of where our analysis drives differing views relative to a consensus baseline.  We list 7 items below, which collectively, suggest we are more optimistic than baseline for a US recovery.

- rise in US cases more attributable to nationwide protests >350 cities rather than state re-opening
- mitigation measures do not require states to "close" but course correction needed
- curious divergence as US cases rising but hospitalizations and death falling, unusual divergence
- consensus vaccine timeline 12-18 conservative given last 4 US pandemics saw vaccine developed 4-9 months from virus ID
- US economy showing ever more "V" shape recoveries
- employment losses > income losses, so the US consumer recovers more quickly
- corporates will find deep cost savings in 2021, hence, 2021 EPS likely to surpass 2019 EPS


The US remains the best performing asset class in 1H2020 (YTD, really) and NASDAQ is even beating the almighty Treasury bond.  In an ironic way, the NASDAQ is a better safety trade than bonds, when it comes to pricing in a global pandemic and global depression.  Even S&P 500 Growth stocks (65% of S&P 500) is almost as good a proxy as a US bond.  If this is the case, it further reinforces our view that US corporates likely get re-rated higher post-crisis, because they are not only "unkillable" but have proven considerable resilience.  This is a stress test for markets that we have not seen for 5 lifetimes and likely never see again.

COVID-19 UPDATE: Daily cases rise over weekend, yet hospitalizations + death in persistent downtrend (both 90% down from peak). Past 4 US pandemics saw vaccines developed 4-9 months, vs 12-18 expected for COVID-19. 32 Epicenter stock ideas.
You are trying to access FSI member-only content.
You need to have an active FSI Macro, or FSI Pro subcription in order to read this article.
If you are already a member at FS Insight, please If you don’t have a subscription to FS Insight yet, you can sign up below.

We accept crypto via BitPay for yearly subscriptions.

Choose one of our yearly plans to save nearly 15%

    • Macro + Crypto
      FSI Pro
      The Complete Package
      FSI Macro + FSI Digital Assets
      from
      $
      249
      /mo
      billed anually
      First Month Free!
    • Macro
      FSI Macro
      from
      $
      199
      /mo
      billed anually
      First Month Free!
      What's included?
      Webinars and Media
      Webinars
      We host over 12 LIVE webinars per year with our research team and high-profile special guests. Incredible value and market insights!
      Weekly
      Coming Soon
      Fireside Chats
      Weekly interviews with our research heads about market opportunities and important updates.
      Research
      Weekdays
      Tom Lee's First Word
      The best market research out there -- on a near-daily basis.
      On market events
      Tom Lee's Intraday Word
      These are released periodically after crucial market developments.
      Daily
      Daily Technical Strategy
      Daily commentary on market trends and short term opportunities.
      Weekly
      Wall Street Whispers
      Exclusive insights based on discussions with institutional clients.
      Weekly
      Quantitative Strategy
      Quantitative market research utilizing industry-leading analytical methods.
      Weekly
      US Policy
      Weekly update on developments in Washington DC and how they may impact Wall Street.
      Weekly
      Weekly Roadmap
      Weekly summary of market events and updates on our key theses.
      Earnings season
      Earnings Daily
      A multi-faceted update of earnings developments.
      Updated bi-weekly
      Signal From Noise
      Highlights timely market themes and sectors with corresponding stocks, cutting through the day-to-day market “noise” for a distinct perspective.
      Stock Lists
      Updated quarterly
      Granny Shots
      Thematic investment stock picks that aim to outperform the S&P 500.
      Updated monthly
      Brian’s Dunks
      Single stock pics that are poised to outperform the index by leveraging sector outperformance and earning revisions strategies.
      Updated monthly
      FSI Sector Allocation
      A sector allocation strategy that is designed to outperform the S&P 500 while taking minimal risk.
      Updated monthly
      Factor Strategy
      List of ETFs based on quantitative models that should outperform the S&P 500 on a monthly basis.
      And More!
      FSI Academy
      Our main goal is to make you a better investor! This series will guide you through key financial concepts and topics in an understandable way.
      Community Questions
      We gather your inquiries and answer them in the most scalable way. Hear directly from our research principals!
      Community Interviews
      Get questions answered directly by our research heads and guest speakers.
      Get access to all the macro research on FS Insight
      First Month Free!
    • Crypto
      FSI Digital Assets
      from
      $
      99
      /mo
      billed anually
      First Month Free!
      What's included?
      Webinars and Media
      Webinars
      Ongoing webinars exploring crypto opportunities, in depth research, and exclusive research offerings from our team of analysts and leading cryptocurrency firms.
      Weekly
      Crypto Chats
      Digestible videos expanding on important market events and metrics that are shaping cryptocurrency markets.
      Research
      Daily
      Crypto Daily Report
      Stay on top of the crypto markets with macro commentary, technical analysis, and the most relevant news.
      Intra month
      Crypto First Word from Tom Lee
      Hear directly from Tom Lee about important cryptocurrency developments.
      Weekly
      Crypto Technical Strategy
      From Bitcoin, Ethereum and Solana to other coins, our Head of Technical Strategy highlights important price movement to help give you an edge.
      Weekly
      Crypto Weekly
      A must-read summarizing our key thoughts about the crypto market, price action, and developing trends.
      Weekly
      Funding Fridays
      Are you looking for investment opportunities in the crypto space? We explore early-stage crypto opportunities in this note about where the smart money is being invested!
      Weekly
      Coming Soon
      Crypto Events
      Never miss another conference, a high-impact software update, or an event that could be market-moving!
      Intra-month
      Deep Research Reports
      Our consulting business delivers incredible deep research reports to highlight the economics and viability of exciting crypto projects.
      Update daily
      Bitcoin Misery Index
      Keep track of bitcoin sentiment to plan your digital assets strategy.
      And More!
      FSI Academy
      Our main goal is to make you a better investor! This series will guide you through key financial concepts and topics in an understandable way.
      Community Questions
      We gather your inquiries and answer them in the most scalable way. Hear directly from our research principals!
      Community Interviews
      Get questions answered directly by our research heads and guest speakers.
      Get access to all the crypto research on FS Insight
      First Month Free!

More from the author

Disclosures (show)

Want to receive Regular Market Updates to your Inbox?

I am your default error :)