The news of President Trump testing positive for COVID-19 sent ripples through equity markets. This morning I noted that I think this is a “knee jerk” reaction that ultimately pushed the Standard and Poor’s 500 index down about 1.0% on the day. Overall, I think the President’s diagnosis is a positive development for the path of COVID-19 in the U.S. Foremost, Trump’s diagnosis should repudiate many of the skeptics who dismissed the need for masks, PP&E and social distancing. This should boost compliance with these measures and could help contain the recent surge in cases.

I think compliance with measures is even more important now as COVID-19 cases are rising again in the US. The daily change in cases vs. 7D ago, which is in our view the leading indicator and what influences the 7D moving average, has jumped over the past three days and it is a notable rise compared to other rises in the past two months (which were largely attributable to labor-day driven data distortions).

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Over the past two weeks hospitalizations were also up about 8% (see chart on left), but the trend in 7D daily deaths remains muted. I think these trends bear close watching over the coming weeks.

I do not think that it is a foregone conclusion that the US is going full "second wave."...

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