18 Jun REALITY VS PERCEPTION
The headlines are stating corona virus cases are “surging.” As stated yesterday, nationwide cases are rising 0.9% on a seven-day average versus 1.0% registered one week ago. Testing however is surging according to the WSJ. There are approximately 500,000 daily tests with total number of tests are now over 25 million. At the onset of the crisis only 8,000 tests were conducted daily. It is expected within 7-10 days 700,000-750,000 tests will occur daily.
With more tests, there will be more verified cases.
Some have stated hospitalizations are also surging. According to the CDC, anyone who is admitted to a hospital is tested for the virus. If the person is tested positive, it is counted as a Covid hospitalization even if the original admittance was for knee surgery.
In several days the President will hold its first rally where over 15,000 people are slated to attend. To write the incredibly obvious, the potential political ramifications are huge.
Speaking of political ramifications, I live in Richmond VA and our governor has delayed entering phase III. The mayor of Richmond has asked to remain in phase I. There is great irony. The mayor of Richmond is advocating and participating in protests. The governor is encouraging protests.
I cynically ask, can Covid tell the difference between a rally and a protest?
Speaking of protesting, I am one of those 72% who support protesting. I am also one of the 80% who abhors the violence, the looting, the destruction. This senseless destruction will destroy support for the cause.
According to a NBC poll, 80% of respondents think the country is spiraling out of control. Princeton University just released a study of the impact of the protest movement from 1960-1972, a movement that resulted in landmark civil rights administration. This study essentially states nonviolent protesting was extremely effective. Once violence overtook the movement, the results went backward.
All of the above can potentially impact the election…protests, rallies, Covid. In my view the media is not journalism as such has degenerated into advocating for a particular cause or agenda. All of which can impact the market.
Commenting about yesterday’s market action, equities were spooked by the virus. Treasuries were nominally unchanged.
Last night the foreign markets were down. London was down 0.41%, Paris down 0.65% and Frankfurt down 0.53%. China was up 0.24%, Japan down 0.45% and Hang Sang down 0.07%.
The Dow should open flat on “fluid” virus news. The 10-year is up 6/32 to yield 0.72%.