If you had any reservations about whether last week’s rally was sustainable, this week’s performance was decisive. On top of a 7% rally last week, the S&P 500 rose another 2.2% this week to 3,585; a new all-time high for the index. And I see several reasons that push the market and epicenter stocks in particular, higher into year end. More on this below.

COVID-19 is spreading across the US at an accelerating rate and as we commented earlier this week, the US could see >200,000 cases within a few weeks. The tally for Thursday was >148,000 (+34,000 vs 7D ago), so by Thanksgiving, daily cases should surpass 200,000.

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And given flu season lasts until Feb 2021, a peak in cases is still sometime away. But the states we are watching most closely are those with fastest case growth in Wave 3, WI, IL, ID, ND, SD, UT, or WIINSU. With the exceptions of ND and SD, daily cases are still surging there. And while we are seeing soft lockdowns in New York and even Illinois, we have yet to see real panic by policymakers in these wave 3 states.

Interestingly, the hospitalization coefficient (or % of new cases requiring hospitalization) varies widely by state. Take North Dakota and Utah for example. These wave three states have a coefficient around 0.4%, which translates to about...

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