Recall, the IHME forecast USA infections would peak Wednesday, 8/11. And as the daily cases below show, this seems to be the case. The issue with this data is that several states, FL and Nebraska, have lagged data, so tireless Ken uses CDC data, which is lagged as well but updated daily.
– but so far so good
– daily cases do seem to be plateauing, at a minimum
The 7 day delta (see below) also flipped negative. Hmmm. This is a good sign. But we will know if this is conclusive a week from now. But for now, wow. The IHME forecast seems to have nailed the date.
Starting Monday, NYC will be requiring proof of vaccination
New York City is the first US city to require proof of vaccination for several activities: indoor dining, indoor fitness, and indoor entertainment/performances. I have a reservation next Monday (8/16) with some friends coming in from out of town. And they are all required to show proof of vaccination.
NYC requirements are shown below, and 4 ways to show proof of vaccination:
– Excelsior Pass <— primarily NY residents
– NYC COVID Safe App
– CDC Vaccination Card
– NYC Vaccination Record
For me, since I do not live in the state of NY, my only two options are:
– NYC COVID Safe App
– CDC Vaccination Card
I don’t want to carry my CDC Vaccination Card, so I decided to download the NYC Safe App.
The download was simple (found on iOS App store)
The app is pretty simple actually. It was really 3 steps:
– enter personal info (name, email, etc)
– upload Photo ID
– upload vaccination record
I did both and the screenshot of the app is below. As you can see, it is a pretty simple app. And I surely prefer to use this app, rather than carry my CDC vaccination record. I am just worried about losing my CDC vaccination record.
…San Francisco on Thursday announced it is also instituting vaccine requirements
On Thursday, San Francisco also announced similar measures, requiring full vaccination for indoor activities.
– the upshot is we are seeing policymakers take deliberate steps to enable freedoms of the vaccinated
– limit the freedoms of those unvaccinated
Clearly, the policymaker and public view towards non-vaccinated has changed. One from empathy towards exclusion. We are not saying this is good policy, but it is the direction of policy.
South Korea develops contactless COVID-19 testing booth = brilliant
A South Korea hospital has developed a COVID-19 testing booth that is contactless:
– booth is self-contained
– holding only the possibly infected
– nurses and doctors interact via “gloves through glass” or via telemedicine
This is actually a practical idea as medical workers no longer need to put on special gear and outfits. As the article above notes, this reduces the level of burden for the staff but provides a completely clean and safe setup:
– the goal is to create a mobile setup
– this reminds us of the Seinfeld, ‘the bubble boy’ episode (Season 4, Episode 7)
I f you don’t remember that episode, below is a screenshot.
STRATEGY: Central view remains “everything rallies” into YE
We continue to see improving conditions supporting an “everything rallies” into YE. But central to this is an expectation is the following conditions:
– Delta variant peaks soon
– No Fall wave
– No Asia panic/massive COVID-19 wave
– 10-year stabilizes/rises
– US economic momentum strengthens as “delta panic” fades
– White House/ Congress pass infrastructure
– No Fed surprises –key
– Seasonals kick in
As we said in July, we viewed the Delta variant as “more bark than bite” and this indeed seems to be the case. And one of the key issues into YE is the COVID-19 pandemic does not flare up in a way that disrupts the global economy.
… Inflation creates market reaction, but the larger fractal suggests inflation might undershoot consensus
Markets will continue to be reactive to inflationary risks — this is something investors have historically shown a “hair trigger” and in this post-pandemic recovery, the market’s sensitivity is even greater, given the further noise created by supply chain disruptions and shortages.
– on Thursday, the PPI (producers price index) came in above expectations at 1.0% month over month, vs 0.5% Street
– this offset the softer CPI (consumer price index) reading Wednesday 0.3% m/m vs Street 0.4%
But as much as markets reacted strongly to the “hot” PPI reading, the most recent PPI readings are reflecting surging commodity costs with a lag. As shown below, copper, oil, lumber and corn have been rising for some time. Thus, the fact these are reflected in PPI now is not surprising.
– however, these commodities are beginning to soften
– so we should see softening of these stronger PPI readings in coming months
…Epicenter likely to lead the “everything rallies into YE”
Our rationale for recommending Epicenter stocks is shown below. Post-pandemic drivers favor Epicenter, particularly if we are going full risk-on.
– the key inflection in the past 10 days is the reversal higher in interest rates
– this becomes a big tailwind for Financials
– this also is a tailwind for Energy XLE 0.22% OIH
– we still like FAANG because there is a pro-cyclical element to FAANG
– there is also a catch-up trade for AMZN -0.53% and AAPL -2.65% which are up a mere 2%/9% versus 18% for S&P 500
…and key groups are indeed turning higher
As we flagged last week, 3 key groups are also inflecting higher. The 3 charts are shown below in sequence:
– China MCHI 0.13% has inflected higher
– Airlines JETS -0.88% and nearing the 200D
– Casinos BETS and showing an impulsive rally higher
T hese were among the first groups to sell-off, peaking between February and April. Thus, their reversal higher is a sign of renewed Epicenter leadership.
Figure: Way forward ➜ What changes after COVID-19
Per FSInsight
Figure: FSInsight Portfolio Strategy Summary – Relative to S&P 500
** Performance is calculated since strategy introduction, 1/10/2019
