Click HERE to access the FSInsight COVID-19 Daily Chartbook.
STRATEGY: Since 1945, December up 100% of the time, when S&P 500 up 10-15% YTD
Tuesday is the first trading day of the final month of 2020. Our data science team, led by tireless Ken, compiled some statistics around the expected return for December. In particular, I was curious how December returns were impacted by YTD gains (Jan 1st to Nov 30th):
– S&P 500 up 12% YTD
– When S&P 500 up 10%-15% YTD (n=13)
– AND a bear market not underway (yes)
– December up 100% of the time and avg gain 3.3% (~100 points)
Unless a bear market starts next month, December looks like it will be a very strong finish for 2020. And the table below generally confirms our view that strong markets finish strong.
Source: Fundstrat
Despite sloppy trading on 11/30, VIX actually declines and approaching 20…
While stocks were sharply lower on Monday (11/29), the VIX actually fell on Monday as shown below. And at 20.57, the VIX is nearing the 20 level, which we view as critical. As we mentioned a few weeks ago, a VIX <20 takes us to pre-pandemic levels. The benefit of a lower VIX is many funds VaR models (value at risk) would enable a higher level of leverage.
– sub-20 VIX could lead to additional institutional inflows into stocks
– sub-20 VIX is thus a strong risk-on signal
– could happen in December = further fuels December rally
Source: Bloomberg
COVID-19, for the moment, seems to be rolling over as evidenced by the recent downturn in daily cases. But we are conditionally hopeful because the holiday season leads to social gatherings and this could trigger a renewed wave in cases. And this is our base case. Even trends in hospitalizations have been encouraging. The updated “hospitalization coefficient” is shown below — this shows the number of incremental patients hospitalized compared to cumulative new cases.
– this figure is 0.8% and rolling over from ~1% a few weeks ago
– In wave 1, this was ~13% and wave 2 ~3.5%
– thus, the rate of incremental hospitalizations is far lower
Source: COVID-19 Tracking Project and Fundstrat
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: Wave 3 STILL rolling over. Daily cases 147,542, -9,404 vs 7D ago… CA+TX still seeing a massive surge
The latest COVID-19 daily cases came in at 147,542, down -9,404 vs 7D ago. Ex-CA, which is seeing a surge, daily cases would be down -15,101 vs 7D ago
– Over the past 5 days, daily cases were lower vs 7D ago, in each of the past 5 days
– It looks like Wave 3 is definitely rolling over
Source: COVID-19 Tracking Project and Fundstrat
7D delta at -15,716 and cases are declining in each of the past 5 days (vs 7D ago)
Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average. If we look ex-CA, which is seeing a massive surge, daily cases are falling even faster:
– ex-CA, daily cases are down -15,101 vs 7D ago
Source: COVID-19 Tracking and Fundstrat
Source: COVID-19 Tracking and Fundstrat
Source: COVID-19 Tracking and Fundstrat
Source: COVID-19 Tracking and Fundstrat
POINT 2: Daily deaths barely rise in Wave 1 and Wave 2 states, as daily cases surge
Daily cases are rising across the US and I thought it would be helpful to look at case trends in the states hit during Wave 1 (NY tristate + MA + RI) and states hit in Wave 2 (FL, CA, AZ, TX, or F-CAT). Anecdotally, on my social media feeds (FB, twitter, etc.) and even Whatsapp, I am seeing more people within Wave 1 and Wave 2 states make comments about knowing someone who caught COVID-19.
Below, for instance, is a Whatsapp from my friend Brent C, who lives down in Monmouth Beach, NJ.
– His comment is something I am seeing more and more of
– More people know someone who has caught COVID-19
Source: Whatsapp
Wave 1: 4 of 5 states are seeing new highs in Daily Cases, only NY is not
The daily case trends (7D avg is the dashed line) for the states hit hardest in Wave 1 are shown below. Of the 5 states, 4 of the 5 are seeing new highs.
– The only state that has not seen a new high is NY states.
Source: COVID-19 Tracking and Fundstrat
Wave 2: 2 of 4 states are seeing new highs in Daily Cases
Of the 4 states in Wave 2, FL, AZ, CA, TX, or F-CAT, CA and TX are seeing new highs in daily cases. As shown below, the daily surge in cases is worst in CA and TX.
Source: COVID-19 Tracking and Fundstrat
Daily Deaths have hardly increased in Wave 1 and Wave 2 states…
But the daily cases are hardly a complete picture. Similar to our generalized comments about lower hospitalizations and lower daily deaths for the US overall, we are seeing the same trends within Wave 1 and Wave 2 states:
– Daily deaths have barely, barely increased in Wave 1 states (NY tristate)
– And barely increasing in Wave 2 states
Source: COVID-19 Tracking and Fundstrat
Source: COVID-19 Tracking and Fundstrat
POINT 3: COVID-19 study of NJ hospitals shows patients with DNR account for ~60% of patients but ~90% of deaths
Is Do not resuscitate, or DNR, the biggest factor in COVID-19 deaths…
Regarding COVID-19 mortality, a study of NJ COVID-19 related deaths is quite eye opening. I saw several comments on twitter over the weekend about this study. The study, published in Clinics in Dermatology (CID journal), was posted on 11/28/2020.
– the comment from Dr. Zoe Harcombe @zoeharcomb made the most succinct point
– 89% of NJ-related COVID-19 deaths were from patients with DNR, or Do Not Resuscitate orders
– DNR patients were about 60% of COVID-19 admissions
– DNR patients were a smaller share of co-morbidities, thus, should have had a higher survival rate
I am somewhat puzzled by this. Does this mean a patient was more likely to die from a DNR? The reason I ask this is that patients requiring life saving measures are already going to have a high mortality rate — meaning, the DNR should not be necessarily coming into play for hospitalized COVID-19 patients. The natural question is whether they received a lower standard of care–maybe?
Source: Twitter.com
The study looked at a two-month period between March 15 and May 15, 2020. So it is best described as looking at the early days of the pandemic.
https://www.cidjournal.com/article/S0738-081X(20)30231-5/fulltext
>60% of NJ-patients had DNR requests, but they account for ~90% of deaths…
About 60% of the patients had DNR requests as shown below. As a side note, it looks like 90% of the patients were male. So it seems to corroborate the comments that men are far more likely to be hospitalized compared to women.
https://www.cidjournal.com/article/S0738-081X(20)30231-5/fulltext
https://www.cidjournal.com/article/S0738-081X(20)30231-5/fulltext
Ironically, the DNR patients had far fewer co-morbidities…
Below is a list of the co-morbidities and the share between DNR and non-DNR. As the chart below shows, while DNR was about 60% admissions, their associated share of co-morbidities was lower.
– thus, we would have expected a smaller death share for DNR
– instead, DNR is about 50% more likely to die from COVID-19
https://www.cidjournal.com/article/S0738-081X(20)30231-5/fulltext
The obvious question is whether hospitals used a lower standard of care for patients with DNR?
