With cases of COVID-19 rising in several key states, and states reversing their reopening trends, the developing recovery is clearly coming under pressure and is in danger of being forestalled. The map below shows which states are reversing direction as regards opening up.
The next chart, “US Hot Spots for New Cases,” shows that some of the states reversing direction aren’t the most egregious when it comes to hot spot activity. That makes it all the more challenging to determine how this trend will play out over the coming weeks and months. The lack of correlation exemplifies the political/emotional aspect to the decision-making process.
Fatalities are going to lag the increase in cases, as evidenced by the chart below. We can see it occurring in Texas. Perhaps because we are looking for a silver lining, or perhaps because we are numbers-driven, it is noteworthy that the fatality rate is running below what it had been. That suggests that the number of fatalities may not rise in a manner commensurate with the number of cases to the same extent as earlier. We think this could make the current shutdown a shorter-lived ordeal than round one. However, being keenly aware of analyst-bias, I readily admit that shorter lockdown periods would be ideal for getting our economy on track for 2021.
Economically speaking, no change to our forecasts yet. Our dashboard of leading indicators was turning increasingly positive. We expect that will come to an end in the coming months. Stay tuned.