COVID-19 UPDATE: NYC breakthrough as new cases 1,613, 78% below peak. Could we now be in the "decline phase" of COVID? Consumer confidence shockingly high = Good. OW Discretionary stocks.

Heads up: We are hosting a conference on Friday to discuss Strategy post "re-start" with our entire team.  Details forthcoming.

COVID-19 remains a global crisis and we realize that many people need to keep up with COVID-19 developments, particularly since we are moving into the more critical stage ("restart economy"), so feel free to share our commentary to anyone who has interest.



Today marks a milestone for COVID-19.

We may now be officially in the "decline" phase of the Healthcare crisis.  That is, we have seen COVID-19 move from exponential --> linear (flattening) --> decline (falling cases).  Why we think we are in the decline phase?  Two things happened in the past 24 hours (hopefully it is not transitory):

- first, NYC reported a breakthrough in COVID-19 case count at 1,613, the first sub-2K day in more than 30 days and now 78% off peak (recall our 75% benchmark, which we acknowledge is arbitrary).

- second, for the first time, >50% of the US counties (based on population) have cases 50% or more off peak (31% with 75% off peak).  This means, half of the US is further in the "decline phase."

The fact we are in the decline on the healthcare side does not really mean this tragedy is over.  Hardly.  Healthcare workers and hospitals are still dealing with a major medical crisis, all the while dealing with massive cash flow shortfalls due to the drop in profitable elective surgeries and other treatments. And we still have to deal with the two waves of economic suffering, but the healthcare abating means it is appropriate for states to begin re-opening their economies.

But today's milestone is building upon quite a number of positive milestones over the past few weeks: 
- No new major metropolitan outbreaks
- the rise in new hospitalizations/ICU peaked
- COVID-19 deaths ~65k (likely peak) are coming in below original forecast and the revised optimistic case of 100k
- Advances and array of treatments is rising and improving
- US jobless claims likely peaked
- US credit markets fully functioning
- 18 states are re-opening their economies
- And with today's data, it looks like NYC/NY state is decisively past the apex

Collectively, this explains why equity markets have shifted into the hands of buyers.  There are also few sellers left.  And as we discuss in this note, we think today's crash in consumer confidence is positive for Consumer Discretionary stocks.  Since 1971, the best time to own Consumer Discretionary is at the bottom of the consumer confidence cycle.  At the bottom.  Not top.



POINT #1: BREAKTHROUGH IN NYC: 1,613 daily cases finally fall 78% from peak and first sub-2,000 day since mid-March... 17 days post-APEXNew York City looks like it finally is decisively over the apex.   

Daily new cases fell to 1,613 which is the first sub-2k day since 3/24/2020 and is also 78% below the peak.  We have used the 75% threshold as a measure of decisive improvement in case count, although that figure is arbitrary, but we view as far enough away from the high to matter.  This is quite a breakthrough.  NYC has seen cases hover around 4,000 for nearly 30 days -- and given the high likely prevalence (based on serological studies), we wondered if NYC would continue to smolder through the summer.

Daily new cases has become less dependable in recent weeks, because of the rapid expansion in testing -- in fact, testing nationwide has roughly doubled in the past 10 days and likely 3X-4X greater in the next 4 weeks.  But still, absolute case count falling for NYC is a positive development. 

So this drop in cases is a big deal, in our view.  We hate to speak too early -- but it looks like one could say "NYC is well into the path of recovery."   And the next step is the re-opening of the NYC economy.

checkout-thomas-lee image
checkout-logo image

Become a Member To Access FS Insight Research

FS Insight gives individual investors access to Tom Lee's research, previously only available to banks and hedge funds.

Monthly

$199/mo

Includes 30-Day Free Trial

Join Now

Annual

-15% $2,028/yr

List Price: $2,388

Savings: $360

Join Now

What's included in your FSI Membership?

tom lee iamge

Thomas J. Lee

Head of Research

Type Publication Mon Tue Wed Thu Fri Monthly
Reports First Word
The best market research out there -- on a near-daily basis.
Intraday Alerts
These are released periodically after crucial market developments.
Real-Time
Weekly Roadmap
Weekly summary of market events and updates on our key theses.
Webinars & Videos Macro Minute Video
Daily video commentary on market conditions & key events.
Outlook Webinars
We host over 12 LIVE webinars per year with our research team and high-profile special guests. Incredible value and market insights!
Yearly
Granny Shots Webinars
CEO Interview Webinars Quarterly
Appearances Archive Real-Time
Allocation Tools "Super Granny" Shots Stock List
Granny Shots we expect to tactically outperform and underperform.
Granny Shots Stock List
Thematic investment stock picks that aim to outperform the S&P 500.
Sector Allocation
A sector allocation strategy that is designed to outperform the S&P 500 while taking minimal risk.
Market Alerts ⚡️FlashInsights
Real-time market commentary about macro and crypto events from our research heads.
Real-Time
tom lee iamge

Mark L. Newton

Head of Technical Strategy

Type Publication Mon Tue Wed Thu Fri Monthly
Reports Daily Technical Strategy
Daily commentary on market trends and short term opportunities.
Weekly Roadmap
Weekly summary of market events and updates on our key theses.
Webinars & Videos Daily Technical Strategy
Daily commentary on market trends and short term opportunities.
Live Technical Analysis
Outlook Webinars
We host over 12 LIVE webinars per year with our research team and high-profile special guests. Incredible value and market insights!
Yearly
Appearances Archive Real-Time
Allocation Tools Newton's Upticks Stock List
Technically derived, intermediate-term picks of attractive risk/reward opportunities from the S&P 500.
Market Alerts ⚡️FlashInsights
Real-time market commentary about macro and crypto events from our research heads.
tom lee iamge

L. Thomas Block

Washington Policy Strategy

Type Publication Mon Tue Wed Thu Fri Monthly
Reports US Policy
Weekly update on developments in Washington DC and how they may impact Wall Street.
Weekly Roadmap
Weekly summary of market events and updates on our key theses.
Market Alerts ⚡️FlashInsights
Real-time market commentary about macro and crypto events from our research heads.
Real-Time
sean farrell Crypto Team

Sean Farrell & Crypto Team

Type Publication Mon Tue Wed Thu Fri Monthly
Reports Market Update
Stay on top of the crypto markets with macro commentary, technical analysis, and the most relevant news.
Weekly Strategy
Weekly summary of market events and updates on our key theses.
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!
Crypto Concepts
We periodically provide in-depth research on the leading protocols, companies, and funds shaping the crypto ecosystem.
Liquid Ventures
A recurring research note focused on delivering unique insights into high-risk investment opportunities within the crypto ecosystem, primarily centered on early-stage or small-cap tokens.
Deep Research
We periodically provide in-depth research on the leading protocols, companies, and funds shaping the crypto ecosystem.
Quarterly
Weekly Roadmap
Weekly summary of market events and updates on our key theses.
Webinars & Videos Outlook Webinars
Ongoing webinars exploring crypto opportunities, in depth research, and exclusive research offerings from our team of analysts and leading cryptocurrency firms.
Yearly
Crypto Comments Daily 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.
Allocation Tools Crypto Core Strategy
A powerful tool designed to help crypto investors build a crypto portfolio that outperforms the industry’s king – bitcoin – regardless of market conditions.
Market Alerts ⚡️FlashInsights
Real-time market commentary about macro and crypto events from our research heads.
Real-Time
Crypto Team

FS Insight Research Team

Type Publication Mon Tue Wed Thu Fri Monthly
Reports First to Market
*Earnings Daily
This note provides investors with a myriad of useful metrics to measure the progress of earnings season
Signal From Noise
Highlights timely market themes and sectors with corresponding stocks, cutting through the day-to-day market “noise” for a distinct perspective.
Community Questions
We gather your inquiries and answer them in the most scalable way. Hear directly from our research principals!
FS Insight 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.
Webinars & Videos Free Macro Webinars
Live webinars and Q&A with our research team and high-profile industry leaders.
Quarterly
Free Crypto Webinars
Live webinars and Q&A with our research team and high-profile industry leaders.
Quarterly

*Daily reporting during each quarterly earnings season.

More from the author

Disclosures (show)

Sign in to read the report!

We have detected you are an active member!

Ray: c2d577-dbc25f-aee3d5-a61f1a-c4fb86

Don't Miss Out
First Month Free

Events

Trending tickers in our research