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%.

 

The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.