COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus. 10 states need to increase testing - FL, WI, AL top 3.

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Tune into our webinar this Friday at 3:30pm ET with IHME head science researcher, Christopher Murray…
But the future is uncertain.  And we wanted to get the perspective of one of the leading COVID-19 healthcare researchers.  We are hosting a webinar with one of the founders of IHME (IHME website healthdata.org), you may know as healthdata.org, and is one of the forecasters for COVID-19 used by the White House.  We will be speaking with Christopher J.L. Murray who is the lead researcher there.  FYI, the IHME is forecasting a brutal flu season, with daily deaths rising to as much as 12,000 per day in December (peaked at ~2,000 in April 2020).

– this Friday at 3:30pm ET.  
– the time is odd but Murray of IHME is based on the West Coast

Similar to our broader work on COVID-19, we want to make this available to the public, so you are welcome to share this webinar invitation (except not to CNN).  The details of this webinar are below:

Details and Specifics
Date: Friday, September 18th, 2020
Time: 3:30 pm Eastern Time
Duration: 45-60 minutes (including live Q&A)

Link –>  Click here to register

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  3. To request a replay of the call, please email inquiry@fsinsight.com.

Should you have any questions, please do not hesitate to contact us at (212) 293-7140 or email inquiry@fsinsight.com.

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Eyes will be on Washington given renewed pressure to pass another stimulus plan.  Earlier this week, our Washington Policy strategist, Tom Block, commented that the ball is in the Democrat’s court regarding passing new stimulus.  And this impasse has a smaller bid/ask as the Senate Republicans passed a $500mm bill vs $2.2T offered by House Democrats.

– As Tom Block notes, the ball is now in Pelosi’s court.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.



As this Washington Post article notes, Pelosi is pushing to get a bill passed and announced that the House would remain in session until a new agreement is struck.  Similar to what happened earlier this year, this means members need to be on call and ready to return.  The path for a deal forward remains unclear but a deal is badly needed, given the dire state of the US economy.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.
COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.



Source: Washington Post




POINT 1: US daily cases 34,546 up +11,738 vs 7D ago. Is this a new wave or more “payback” due to understated Labor Day week data?
Daily cases came in at 34,546 Tuesday, which is +11,738 vs 7D ago.  This is a break in the recent pattern, to the extent that instead of seeing daily cases down vs 7D ago, we are seeing a rise for Monday and Tuesday.  There are two explanations for why we are seeing such large jumps in the last two days. Either:

– FL and TX saw particularly large increases vs 7D ago –> TX up 3X and FL up 2X (see below)
– cases are suddenly surging this week, due to back-to-school and Labor Day social gatherings, or
– case data was suppressed throughout last week due to the Labor Day weekend, and we are seeing “payback” this week


COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: COVID-19 Tracking Project


Next week will give us a clearer picture…
I don’t know which of the above explanations is correct.  So, we will need to wait until next week to see which of these is the correct explanation.  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, Tuesday’s rise in daily cases vs 7D ago is a reversal of the steady declines seen over the past few weeks. 

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.

Source: COVID-19 Tracking and Fundstrat 


The states with the significant increase are TX, FL, PA and WI. As mentioned above, the cases in TX and FL have been up 2-3X. TX and FL accounted for 40% of the increase vs. 7D ago (4,693 of 11,738).

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.
COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.
COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.

Source: COVID-19 Tracking and Fundstrat



POINT 2: Malls improved cash flows as surveys show consumers shopping again
In perhaps one of the stronger signs of improving consumer confidence, surveys show consumers are venturing out of their homes again and priming the economy.  Yesterday, Tanger Factory Outlets Center (NYSE-SKT) saw its stock jump >11% on positive news regarding its properties:

– August rent collection was 85% of billed rents, a big jump from 81% in July
– 98% of leased stores now open

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.



Retailers are among the most devastated by the pandemic and these figures reported by SKT are certainly encouraging.  In fact, these improvements are the result of increased customer traffic — consumers are gaining confidence.  This is particularly true since there has not been a second stimulus payment made.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.

Source: Bloomberg

The latest consumer survey from Gordon Haskett seems to confirm that Americans are feeling more comfortable leaving their homes.  We like this survey conducted by the Broadlines retail team there, led by Chuck Grom.  This most recent survey was conducted in September.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: Gordon Haskett

The most interesting insights, for us, are the changes in consumer willingness to engage in certain activities. Throughout this pandemic, consumers seemed most willing to visit “off-mall stores” and in the most recent survey, ~51% feel this way, even without a vaccine.

– Notably, look at how this willingness tanked during week 21, when the media was focused on the second wave in F-CAT
– And while this off-mall figure has moved up sharply since then, it is lower than it was 10 weeks earlier.

In other words, the hysteria around case surveys caused the respondents to bunker and while case trends have since improved, this has not led to a full recovery in behavior.  One can look at this in multiple ways, but we see this as a half-full / positive situation, as we believe COVID-19 is more contained than it is perceived.  The best evidence of this is the fact that more and more companies are seeing employees return to the offices.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: Gordon Haskett


And if this return for consumers plays out, mall operators like SKT could see upside in their shares.  As you can see, the all-time high for SKT was $42.20 — although that was 2017.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.





POINT 3: Testing adequacy by states –>  10 states need increase testing –> FL, WI, AL top the list
We have not spent a lot of time recently talking about positivity rates.  And a number of our clients have forwarded us some work suggesting there may be quite a lot of “false” positives in the data. We are not writing about that today, but we are gathering information and we have a number of thoughts on this.  But we thought it better to focus on the bigger picture, for now, of the overall levels of testing in the US.

The overall trends for testing in the US have been positive, with a positivity rate remaining below 10% for much of the last 5 months.  And it has trended below 5% in the past 8 weeks, which is a good sign.  

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.



Source: COVID-19 Tracking Project


And if we look at this by state, we can about half of the US has a positivity rate below 5% and a number are in the 1% range, including NY state, which has virtually the lowest positivity rate in the nation.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: COVID-19 Tracking Project

But to get a fuller sense for the testing adequacy of a state, we should look at both the level of testing (higher the better) and the associated positivity.  We look at the last 10 days, or 10-day cumulative below:

– Total tests past 10 days (per 1mm) and above 15,000 is good, ~1.5% population
– Positivity rate below 10% is good, 5% even better

The red box below is where states are probably not doing enough testing.  The positivity rate is high, and the level of testing is low.  This is where outbreaks could be “uncontained” because they are not properly tracked.

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: COVID-19 Tracking Project


There are 10 states in this red box.  The largest is Florida and the remaining are quite small. 

COVID-19 UPDATE: Eyes on Washington as Congress pushes to pass stimulus.  10 states need to increase testing - FL, WI, AL top 3.


Source: COVID-19 Tracking Project

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