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COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good

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

STRATEGY: Decent incoming weekend data and speculative excess unwound…
It was a pretty decent weekend for US COVID-19 data, particularly on the vaccine front.  AstraZeneca is set to resume its trials (paused last week due to an illness of a participant) and Pfizer CEO, in a CNBC interview, stated that a vaccine might be given to Americans before year-end.  Thus, progress continues on the healthcare front.  

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good

Source: WSJ

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good

Source: CNBC

And incoming case data over the weekend was encouraging as well.  We expect the headwind of surging college cases to slow/impair progress, but daily cases managed to fall throughout the weekend.  In fact, as we discuss below, daily death trends are also accelerating in their improvement, even faster than case trends.  The 7D moving average of deaths is now 729, well below the 2,000 levels seen in March/April.

If there was any negative headline, it is this one below.  Israel is moving to a full 3-week lockdown to stem the surge in cases there.  This, by the way, contrasts with the reaction of Spain and France, both nations have seen new highs in cases, but have not taken a similar step.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good
COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good

Source: Washington Post


Given how much selling we have seen in the past 10 days or so, this vaccine news is a positive development.  And along with the improving case data, suggest that the US economy recovery should continue.  As JPMorgan’s Flows and Liquidity report highlights, much of the excessive long positions are likely unwound as well.  Incidentally, JPMorgan attributes the superspike more to CTA and institutional momentum trading, rather than retail investors.  

– we don’t want to sound like a broken record, but pullbacks need to be bought
– the sentiment, based on our conversations, remains quite negative, which is fuel for a rally

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: JPMorgan




POINT 1: US daily 32,522 vs 33,243 7D ago.  Flat is good.
As we start a new week of COVID-19 case data, daily cases came in at 32,522 Sunday, which is -721 vs 7D ago.  This is essentially flat and not at the strong pace of declines seen last week.  It is too early in the week to draw sweeping conclusions. 

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking Project


Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average.  As shown below, daily cases were down modestly vs 7D ago and is a slowing compared to some of the larger declines last week.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good

Source: COVID-19 Tracking and Fundstrat 

The states accounting for a rise in daily reported results is really 3 states:
– Wisconsin
– Alabama
– Indiana

These 3 states have large universities, so it is possible that the increases seen here are due to the college campus spread.  We will be watching these states but at this time it is too early to know.


COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good
COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good
COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good




Source: COVID-19 Tracking and Fundstrat




POINT 2: COVID-19 far more deadly for NY/NJ vs rest of USA… re-opening big deal
The 7D moving average of daily deaths is 729 per day.  This remains a tragically high figure, but is way down from Feb/March when daily deaths averaged 2,000 per day.  The drop in daily deaths is encouraging, particularly since this level of deaths did not track the case surge closely.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking Project

But as shown below, the 7D delta in daily deaths has been dropping in a more sustained fashion than the change in daily cases.  Thus, while cases have remained somewhat stubborn, deaths have been falling.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking Project

The deadliest places for COVID-19 were really NY tristate… much less deadly in F-CAT…
In fact, the tragedy of very high death rates from COVID-19 was really seen in the NY tristate area and there was a significantly lower rate of death outside of NY tristate.  Below are the 10 states with the highest cumulative death rates (death/cases).

– As you can see, these are all Northeastern states, with the exception of Michigan.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking Project

In fact, take a look at the scatter chart below comparing total cases and total deaths by state.  As you can see, NY and NJ saw a steep curve with high mortality.  

– In fact, total deaths in CA and TX are similar to NJ
– But cases in CA and TX are 3.5X-4X that of NJ

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking Project 

This is why NY and NYC re-opening is more important than many appreciate…
This is why we believe the re-opening of NYC indoor dining and a return to the office is very significant.  Arguably, COVID-19 was the deadliest in the NY tristate area (based on death rates), and this return to normalcy potentially positive benefits the financial markets more than we realize — that is, because so many professional investors are based in the NY tristate area.

– as you can see, in total deaths, NY and NJ are among the highest anywhere else in the nation.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: COVID-19 Tracking



Spain and France — new highs in daily cases and basically no deaths…
By the way, while France and Spain have seen a new all-time high in daily cases.  We have written about this for some time, so it is not really something new for us.  The lack of panic in those nations has been notable.  There are some alarm and consternation, but little panic.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: Johns Hopkins


This is very likely due to the fact that daily deaths have not followed the surge in cases.  As shown below, the slope of deaths vs cases in both nations has nearly flat-lined.  Thus, while cases are soaring, there is not a commensurate rise in deaths.

COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: Johns Hopkins



POINT 3: Colleges are increasingly asking students to quarantine…
Below is one of the many headlines over the past few weeks.  MSU is asking all of its students to quarantine, due to a surge in cases reported at that university.  Every college needs to establish rules that make sense for students, professors, administrators and parents.  And I don’t personally know what solution works best.

– but I think MSU’s approach is less disruptive, that shutting its campus down entirely and going full “remote”


COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: ABC


RANDOM: Only network news considered “balanced” based on viewership…
This highlight from a Pew Research survey highlights why we cannot trust most news today.  The survey looked at the political leanings of viewers:

– 93% of Fox News leans Republican
– 79% of CNN leans Dem
– 95% of MSNBC leans Dem

Is it any wonder we cannot trust most media to avoid political bias?  The surprise is the network news.  Apparently, those are pretty split down the middle.


COVID-19 UPDATE: Incrementally positive developments on vaccine from AstraZeneca and Pfizer. Case data solid. Speculation unwound = good


Source: twitter.com 


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