COVID-19 UPDATE: Few signs wave 1 and wave 2 epicenters seeing "new wave" of cases. 3Q2020 highlighting dramatic operating leverage of "epicenter stocks"

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STRATEGY: While markets await Election day, signs of operating leverage in 3Q2020Taking stock of 2020 so far, in my opinion, COVID-19 is the most important macro story and in some ways, more important than fiscal stimulus and in some aspects, more important than the Fed (Fed can't cure COVID).  What has been lost in the past few weeks (into 2020 Presidential elections) is that 3Q2020 earnings have been pretty good.  One thing that stands out to us is the growing evidence of operating leverage in the epicenter groups.It has been a rough run for "epicenter" stocks for the past few weeks.  The surge in COVID-19 cases coupled with the delay in fiscal stimulus has weighed heavily.  But we still remain constructive on these stocks, even as the past few weeks have been awful.  Mainly, we see US economic momentum strengthening in 2021, even with COVID-19 still surging in the US (less deadly and lockdowns are not needed here).  And we see additional reasons Cyclicals, aka epicenter, could see surprisingly strong EPS in 2021:- restricted topline environment forces these companies to slash operating costs ala 2008- demand recovery from either stimulus or vaccine = operating leverage- P/E can e...

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