COVID-19 UPDATE: Good weekend of data as US new cases collapse to 27,178, below 30,000 a HUGE milestone. Violence of action on "epicenter"

Click HERE to access the FSInsight COVID-19 Daily Chartbook.

Overall, this was a very good past few days for COVID-19 data.  The new daily COVID-19 cases Monday fell to 27,178, the first sub-30,000 figure in 3 months and on the heels of many counties showing widespread improvement -- 44% of US counties (based on 7D avg) now see daily cases 75% off their highs.  This is the highest reading since the pandemic started and higher than the 42% last week.

Of course, Labor Day weekend is also a test of the path of the virus.  With back to school and many social gatherings, policymakers worry about a new surge of cases.  But if we see continued case trend improvements over the next two weeks, this would be a very positive surprise.  The future is uncertain and we have been surprised by the direction of trends, so we cannot hazard a guess.


STRATEGY: a taste of "violence of action" when (or if) epicenter gains traction...
The final two days heading into Labor Day weekend was a massacre for markets, with intense selling and lots of proclamations of "bubble talk" and "I told you so" -- and this despite very good incoming economic data (jobs report solid).

- Markets were due for a pullback, so can anyone be surprised?
- But we hardly see this as a warning shot, there is just way too much cash on the sidelines


Money on sidelines has "barely" budged... and now down to "only" $4.5 trillion, from the peak of $4.75 trillion
The mountain of cash on the sidelines has diminished reluctantly somewhat and is down to a "mere" $4.5 trillion from $4.75 trillion.

- clearly, investors remain cautious.  
- more cash on sidelines than versus Feb 2020 highs when it was $2.8 trillion
- going to Feb levels is $1.7 trillion of cash going into stocks

Is it any wonder stocks have massive upside still?

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