COVID-19 UPDATE: Director of Supply for Operation Warp Speed says ubiquitous vaccine by mid-2021. If so, COVID-19 ends before then...

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

In our conversations and emails with clients over the past few days, it seems most are skeptical that equities can rally strongly in December.  To an extent, I understand this, given the near historic gains of November, particularly in epicenter stocks.  And at the same time, most see a case for stocks to do well in 2021, given the economic recovery.

So it seems that investors see some sort of “gap” between stocks “stalling” in December, but doing well in 2021.  If this is consensus (it might be), then investors are not necessarily positioned for a YE rally.  As we noted yesterday, history suggests stocks should rally in December — strong markets stay strong.

STRATEGY: DeepMacro sees big November jobs report of +1.05mm, or double consensus
Perhaps the most important economic data point this week is the November jobs report.  Consensus (per Bloomberg) is 575,000.  DeepMacro, the economic research firm that uses big data, sees 1.05 million payrolls.

– this would be a HUGE beat and exceed the October gains of 906k
– If DeepMacro is correct, the November jobs report would further fuel the December/Santa Claus rally.

DeepMacro is basing its views on new job postings and the speed of filling these openings.  I have found their framework useful and they are often correct directionally.  So this is worth keeping in mind.

As for COVID-19 cases, the rollover in daily cases seen in the last 5 days seems to be reversing — in other words, we witnessed a short-term peak in Wave 3 but this respite is over.  To an extent, the pandemic is gaining strength, as Thanksgiving brought together families.  But the bigger factor in today’s rise is the “payback” from last week.  During Thanksgiving week, closures and reporting lags made cases lower than actual.

Source: COVID-19 Tracking Project  and Fundstrat


This is not necessarily a good thing.  And daily deaths reached 2,426 today, approaching the Wave 1 peak of 2,760 (see Point #2).  This is not surprising given daily cases are 4X wave 1’s peak and hospitalizations are at a record.  The difference, however, is Wave 1 deaths were concentrated in NY tristate, where that region saw >30 daily deaths per 1mm.  Today, the various regions are seeing daily deaths of 5 per 1mm — far lower in each geography, but more deaths in aggregate.

Source: COVID-19 Tracking and Fundstrat    


But the vaccine distribution is moving forward and the Head of Distribution and Supply for Operation Warp Speed,  Lt General Paul Ostrowski, said the widespread ubiquitous vaccine availability should be seen by mid-June 2021.  If this is correct, COVID-19 pandemic should be largely over before then = risk on.

This is true even if many Americans refuse to be vaccinated.
 

ADDENDUM: We are attaching the stock lists for our 3 portfolios:
We get several requests to give the updated list for our stock portfolios.  We are including the links here:

– Granny Shots  –>       core stocks, based on 6 thematic/tactical portfolios
– Trifecta epicenter  –> based on the convergence of Quant (tireless Ken), Rauscher (Global strategy), Sluymer (Technicals)
– Biden vs Trump  –>   based on correlation to either candidate odds

Granny Shots:
Full stock list here –> Click here
Tickers: AAPL, AMZN, AXP, BF.B, CSCO, EBAY, GOOG, GRMN, GWW, INTC, KLAC, LEN, LOW, MNST, MSFT, MXIM, NVDA, OMC, PM, PYPL, QCOM, TSLA, XLNX

Trifecta Epicenter:
Full stock list here –> Click here
Tickers: ACM, AGCO, AN, ASB, BBY, BHF, BK, BOH, BWA, CF, CFX, CPT, CRI, CSL, DAL, DOV, DRI, EMR, EOG, F, FITB, FL, FLS, FNB, GE, GM, GPC, GPS, GRMN, HAS, HFC, HIW, HLT, HOG, HP, IBKR, IEX, JBHT, JBLU, KIM, LB, LEG, LUV, LYB, MAR, MGM, MIDD, MLM, MMM, MOS, MPC, MTG, NCLH, NEU, NNN, NOV, NUE, NVT, NWL, NYCB, OC, PB, PBCT, PHM, PII, PNFP, PNR, PSX, PXD, RCL, RS, SBNY, SBUX, SIX, SLB, SNA, SON, STL, STOR, SYF, TOL, TPX, UBER, UNP, VFC, VNO, WAB, WBS, WH, WTFC, WYND, XYL

Biden White House vs. Trump White House:
Full stock list here –> Click here

ADDENDUM II : Did you miss our Webinar on Nov 19? We had the big guns, including David Zion, of Zion’s Research
We had a great line up and discussed a lot of things between now and year-end.  Here are the replay links:

– Replay –> Click here

POINT 1: Daily cases 174,244, +11,997 vs 7D ago… Holiday-related “rollover” ending
The latest COVID-19 daily cases came in at 174,244, + 11,997 vs 7D ago. 

– For a stretch of 5 days, daily cases were down vs 7D ago, but this has reversed
– The drop in cases in the past week reflected, in part, holiday-related closures
– And with social gatherings during Thanksgiving, we expect cases to start rising

This looks like Tuesday’s data is the start of this “payback”

Source: COVID-19 Tracking Project  and Fundstrat


7D delta at +11,997, ending the 5 day stretch where cases were declining…
Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average. 

– The 5 day stretch of falling cases seem to be ending

Source: COVID-19 Tracking and Fundstrat  

Source: COVID-19 Tracking and Fundstrat  

           
Source: COVID-19 Tracking and Fundstrat








POINT 2: Wave 3, Daily Deaths in total nearing new high…
Daily deaths reached 2,426 which is nearing the Wave 1 peak of 2,760 set in early May 2020.   Daily cases are nearly 4X greater than the Wave 1 peak and hospitalizations are already at a new high.  So it is not entirely surprising to see daily deaths rising. 

Source: COVID-19 Tracking and Fundstrat    


And as we discussed a few weeks ago, the largest incremental share COVID-19 has been increasingly older Americans.  And older Americans have a greater risk of developing a more severe and deadly case of COVID-19.  The good news is that there are better treatment regimens now as well as more approved and seemingly effective treatments (Regeneron, Remdesivir, Olumiant, etc.).

Source: CDC and Fundstrat


The deaths, in aggregate, are set to exceed Wave 1 highs (2,760) but the concentration regionally is much lower.  As shown on the chart below, looking at daily deaths per 1mm by tiers of states, we see the level of daily deaths per 1mm is far lower.

– In Wave 1, NY tristate saw nearly 30 deaths per 1mm residents daily
– today, most states are <5 daily deaths per 1mm

Source: COVID-19 Tracking and Fundstrat   





POINT 3: Director of Supply for Operation Warp Speed says ubiquitous vaccine by mid-2021.  If so, COVID-19 ends before then…
The CDC advisory group formally announced that Healthcare workers and Nursing home residents would be prioritized to receive the first doses of the approved COVID-19 vaccine.  It was widely anticipated and reported that these two groups would be prioritized, so it is not a surprise necessarily.  

Source: Washington Post


But I was somewhat surprised to see that of the 14 members of the panel, 1 dissented.  As the article notes, Helen Talbot, an associate professor at Vanderbilt was the dissent.  And it looks like she was against the idea of vaccinating long-term care residents.

– question –> do you agree with this?
– I am not sure I see the rationale behind a dissent

Source: Washington Post


As for the broader public, it looks like the rest of the US will have ubiquitous access by June.  That statement was made by the director of Supply, Production for Operation Warp Speed – Lt General Paul Ostrowski.  I am using the article from the MIT Technology Review (see below).

– June is half a year away, but this is not saying that all Americans need to wait by June
– Rather, by June, there should be sufficient supplies for anyone to get vaccinated

If this timeline proves to be correct, COVID-19 will be largely over by mid-2021.

Source: MIT Technology Review