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

We are shifting to a 4-day a week publication schedule:

  • Monday
  • Tuesday
  • Wednesday
  • SKIP THURSDAY
  • Friday

STRATEGY: FOMC taking backseat as re-opening back in focus  
US daily COVID-19 cases are showing continual improvements.  This week, daily cases fell to 4,228 on Sunday and even Monday’s cases were down from the prior week.  Given the typical daily fluctuations, we think daily cases will likely be sub-5,000 for most of the week.  Compared to where daily cases were in December (nearly 300,000 per day), 5,000 per day is tremendous progress.


FOMC taking backseat as re-opening back in focus




And this reduction in cases is setting the US to see a full re-opening by the end of this month.  Look at the latest TSA checkpoint figures, where daily travelers levels are quickly approaching pre-pandemic levels:

– 1.91 million is latest data point (7D avg)
– 2.61 million is pre-2020 level
– these figures are all the more impressive considering business and international flights are limited

FOMC taking backseat as re-opening back in focus


Even cruises are again launching from US ports.  Royal Caribbean’s Freedom of the Seas departed from PortMiami this past Sunday.  Recall, the CDC had taken the hardest line against cruise lines.  

– the resumption of sailing is the latest sign of a return to normalcy
– is it any wonder the FOMC eliminated “pandemic tail” risks from their thinking?
– is it any wonder why “dot plots” might be advancing?

If so, this is the right reason for the FOMC to become incrementally less dovish.  Even slightly so.

FOMC taking backseat as re-opening back in focus


Source: https://www.bloomberg.com/news/articles/2021-06-20/first-u-s-cruise-in-15-months-set-to-sail-as-restrictions-ease


More importantly, this week, markets will focus on incoming hard and soft data.  As highlighted below, we will get multiple measures of the health of corporate and consumer spending.  And this should refocus markets on the health of the economic expansion.

– and incoming data, while healthy, is not expected to be so strong to ignite fears of over-heating
– if risks of overheating were elevated, the US 10-yr yields would be far higher than the 1.5% currently.

FOMC taking backseat as re-opening back in focus




STRATEGY: Millennials are more central to economic resilience than most appreciateStocks rallied sharply Monday.  Wow.  We thought markets would flail until midweek before rallying sharply.  But I guess a ton of position squaring took place Friday, during “quad witching” and along with 5 days of carnage, and brought markets into equilibrium faster than we expected.

Equity markets have shown exceptional resilience in 2021 and we remain constructive.  As we have written multiple times, we see the S&P 500 reaching 4,400 by the end of June.  This seems a bit of a reach given that is only 10 days away.  But the “chop” from last week has pushed equity markets into a position where a sharp rally is possible:

– S&P 500 touched the 50-day moving average
– this usually marks the end of a pullback

– S&P 500 30-minute RSI fell below 30
– 4 of the last 5 times this happened, the S&P 500 staged a strong snapback

Given the turmoil of last week, from both FOMC and quad witching, many stocks fell for non-fundamental reasons.  And with interest rates now lower, we see this as supportive of stocks.


The 50-day moving average is a level where the S&P 500 has been “touching” and then rebounding smartly.  Take a look below.  And given the strong bounce Monday, this seems like another case of this.

FOMC taking backseat as re-opening back in focus




On a shorter time frame, we like to look at the 30 minute RSI (14 period) and below we can see the S&P 500 on this measure fell into levels that normally result in a sharp rally:

– 4 of the last 5 times this happened, the S&P 500 rebounded sharply

FOMC taking backseat as re-opening back in focus



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), Technicals
– Violence in USA –> companies that are involved in some aspect of home or personal security. We are not “recommending” these stocks, but rather, bringing these stocks to your attention.

Granny Shots:
Full stock list here –> Click here

Trifecta Epicenter (*):
Full stock list here –> Click here

Power Epicenter Trifecta 35 (*):
Full stock list here –> Click here

Violence in USA:
Full stock list here –> Click here

(*) Please note that the stocks rated OW on this list meet the requirements of our investment theme as of the publication date. We do not monitor this list day by day. A stock taken off this list means it no longer meets our investment criteria, but not necessarily that it is neutral rated or should be sold. Please consult your financial advisor to discuss your risk tolerance and other factors that characterize your unique investment profile.








POINT 1: Daily COVID-19 cases 10,274, down -917 (ex-FL)  vs 7D ago… The speed of case decline has slowed down…
_____________________________

Current Trends — COVID-19 cases: 
– Daily cases   10,274 vs 12,182 7D ago, down -1,908
– Daily cases ex-FL   10,274 vs 11,191 7D ago, down -917
– 7D positivity rate   1.8% vs 1.9% 7D ago
– Hospitalized patients   13,996 down -6.9% vs 7D ago
– Daily deaths    281,  down 15% vs 7D ago
_____________________________

– As we noted previously, Florida stopped publishing daily COVID stats update on 6/4 and we switched to use CDC surveillance data as the substitute. However, as CDC surveillance data is subject to a one to two-day lag, we added a “US ex-FL” in our daily cases and 7D delta sections in order to demonstrate a more comparable COVID development.

– The latest COVID-19 daily cases came in at 10,274 new cases, down -917 (ex-FL)  vs 7D ago. If taking WA and WV into account (both stats were not available as of Monday 7PM ET), the 7D delta in daily cases is likely to reduce to -200 to -300. As the chart below shows, the absolute daily number of new cases has been down a lot compared to 4 weeks ago. But, the 7D delta in daily cases (the speed of decline) has indeed slowed down. Did the reopening cause the downward momentum in cases to pause? Or perhaps it was the Delta variant? Maybe it was an aberration and cases are about to accelerate back to the downside? We simply don’t know the answer. But the good news is case trends remain on a downtrend and, as the future is uncertain and COVID remains exceedingly mysterious, the case data will be worth watching in the next few days.



FOMC taking backseat as re-opening back in focus






7D delta in daily cases has been < -1,000 in last two days…
The 7D delta has reduced to less than -1,000 over the past two days. The decline in daily cases indeed has slowed down as the chart below shows. The good news is that we have not seen a sudden surge in case figure, but the slow down in the case decline is still worrisome. Therefore, the case data in the next few days are worth watching as it will give us a more clear view on the case trend.
  
 

FOMC taking backseat as re-opening back in focus







Current hospitalization, daily deaths and positivity rate are at all time low…
Below we show the aggregate patients who are currently hospitalized due to COVID. After a mini-surge in March, the number of patients currently hospitalized rolls over again. Positivity rate is also following the similar pattern. Currently, all three metrics – current hospitalization, daily deaths and positivity rate – are at their all time lows since the start of the pandemic.

FOMC taking backseat as re-opening back in focus



 

FOMC taking backseat as re-opening back in focus





 

FOMC taking backseat as re-opening back in focus


FOMC taking backseat as re-opening back in focus


POINT 2: VACCINE: Several states reported unusual low number of doses administered possibly due to the Juneteenth…
_____________________________

Current Trends — Vaccinations: 
– avg 1.1 million this past week vs 1.1 million last week
– overall, 44.9% fully vaccinated, 53.0% 1-dose+ received
_____________________________



Vaccination frontier update –> all states now near or above 70% combined penetration (vaccines + infections)

Below we sorted the states by the combined penetration (vaccinations + infections).  As we commented in the past, the key figure is the combined value >60%, which is presumably near herd immunity. We have overlaid our case progress with that of Israel several times to demonstrate what should happen to cases once immunity reaches a certain critical level in the population.  That is, the combined value of infections + vaccinations as % population > 60%. The persistent and rapid decline in cases suggest that the US is following a similar path to Israel (see our prior notes) while nations with less penetration continue to struggle more. 

– Currently, all states are near or above 70% combined penetration
– RI, SD, MA, ND, CT, NJ, DE, NY, IL, UT, MN, NM, NE, AZ, PA are now above 90% combined penetration (vaccines + infections)
– So gradually, the US is getting to that threshold of presumable herd immunity. So long as a vaccine resistant variant doesn’t spread widely, the continued retreat of cases should continue. 

FOMC taking backseat as re-opening back in focus





Below is a diffusion chart that shows the % of US states (based on state population) that have reached the combined penetration >60%/70%/80%/90%. As you can see, all states have reached 60% and 70% combined vaccination + infection. 89.4% of US states (based on state population) have seen combined infection & vaccination >80% and 60.2% of US states have seen combined infection & vaccination >90%.  

FOMC taking backseat as re-opening back in focus


 


There were a total of 603,333 doses administered on Monday. Over the past 7 days, on average 1,122,937 doses were administered per day, up 1.5% from 7D ago. As the chart below shows, the vaccination has slowed down over the past few days. But this is likely because several states reported unusual low number of doses administered (see below) possibly due to the new federal holiday, Juneteenth. Hence, we expect some “true-up” in the number of doses administered in the next few days. Compared to early June, the average number of daily vaccines administered is still about 20% higher.

FOMC taking backseat as re-opening back in focus





13 states reported unusual low number of doses administered…
Below we listed the 13 states that reported less than 1,000 doses administered on Monday. As you can see, the vaccination figures are much lower than its 7D average. Hence, we expect some “true-up” in number of doses administered in the next few days. Also, the daily number of vaccines administered seems to fluctuate a lot among states. Therefore, the 7D average daily number of vaccines administered might be a better gauge to measure the vaccination trend.


FOMC taking backseat as re-opening back in focus


 



95.5% of the US has seen 1-dose penetration >40%… 
To better illustrate the actual footprint of the US vaccination effort, we have a time series showing the percent of the US with at least 35%/40%/45% of its residents fully vaccinated, displayed as the orange line on the chart. Currently, 89.9% of US states have seen 35% of their residents fully vaccinated.   However, when looking at the percentage of the US with at least 40% of its residents fully vaccinated, this figure is 66.8%. And only 48.1% of US (by state population) have seen 45% of its residents fully vaccinated.

– While 95.5% of US states have seen vaccine penetration >40%, 78.7% of them have seen 1 dose penetration >45% and 59.4% of them have seen 1 dose penetration > 50%.
– 89.9% of the US has at least 35% of its residents fully vaccinated, However, only 66.8% of US has fully vaccinated >40% and 48.1% of US has fully vaccinated >45%.


FOMC taking backseat as re-opening back in focus





This is the state by state data below, showing information for individuals with one dose and two doses.

FOMC taking backseat as re-opening back in focus


The ratio of vaccinations/ daily confirmed cases is generally trending higher (red line is 7D moving avg), but this is largely due to the decline in daily cases.


– the 7D moving average is about ~100 for the past few days
– this means 70 vaccines dosed for every 1 confirmed case

FOMC taking backseat as re-opening back in focus








In total, 317 million vaccine doses have been administered across the country. Specifically, 176 million Americans (53% of US population) have received at least 1 dose of the vaccine. And 149 million Americans (45% of US population) are fully vaccinated.

FOMC taking backseat as re-opening back in focus


 




POINT 3: Tracking restrictions lifting and subsequent effects in individual states

Point #3 focuses primarily on tracking the lifting of restrictions, as states have eased the majority of mandates.  Keep in mind, easing/lifting restrictions are contingent upon state of emergency ordinances being renewed. 

– States in groups 1 and 2 represent states that let their emergency ordinances expire, or that never had one in the first place
– Note: IL and HI are not listed. This is because restrictions lifting is determined at the county / island level, and no statewide policy will be established to lift restrictions until a full reopening

So there is a spectrum of approaches.  Our team is listing 3 tiers of states and these are shown below.  

– states that eased all restrictions in 2020: AK, OK, MO, FL, TN
– states that have eased all restrictions in 2021 to now: ND, SD, NE, ID, IA, MT, MS, AZ, SC, WY, TX, GA, AR, KS, WI, IN, AL, UT, NH
– states that are still easing restrictions in 2021: OR, ME, WV, WA, MN, MA, NC, KY, LA, CA, DE, PA, NM, OH, CO, NJ, VT, MD, NV, NY, CT, VA, MI, RI, DC





GROUP 1:  States that lifted restrictions in 2020…
The daily case trends in these states are impressive and it is difficult to say that lifting restrictions has actually caused a new wave of cases because the case trends in these states look like other states.

FOMC taking backseat as re-opening back in focus


  

FOMC taking backseat as re-opening back in focus







GROUP 2: States that have lifted restrictions in 2021 to now…
Similar to the list of states above, the daily case trends in these states are impressive and it seems that lifting restrictions hasn’t caused an increase in cases.  

FOMC taking backseat as re-opening back in focus


FOMC taking backseat as re-opening back in focus





GROUP 3: States that are still easing restrictions in 2021…
These states have begun to lift restrictions, but have yet to ease all restrictions.  The date of each state’s most recent restrictions lifting is indicated on each chart.  The case trends in these states have been mostly positive.

– Easing restrictions appears to have contributed to an increase in cases in several of these states, most drastically in OR, ME, WA, and MN

FOMC taking backseat as re-opening back in focus

 

FOMC taking backseat as re-opening back in focus

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