Some new milestones were achieved today. California, the largest state in the US, announced plans to open the economy (Stage 2) this Friday, making 24 states with phased opening and 54% of GDP. And NY state saw daily cases CRASH to 2,538, capping 5 days of declining cases and bringing total cases down 76% below peak. NY state has made much progress in the past week and the recent data, including hospitalizations down, decisively show sustained slowing of COVID-19. NJ also saw cases fall 50% today (1,525 from 3,027) so NY is not necessarily a “fluke”– is it the weather?
In any case, so many states saw a decline that the total new cases in the US fell to 21,783, which is down from 25,614 yesterday, 30,507 two days ago (you get the picture) and is down 39% from the 4/24/2020 peak of 36,090 cases.
By the way, the big data provider, Deep Macro, posted updated consumer movement, and it looks like retail visits, even to automotive retail, is rising. As more states open, the question of how consumers re-engage will be answered. But so far, it looks better than what many feared (see below).
The state openings and case counts peaking, and also “earnings confessions” are all acting to reduce uncertainty. And this is, in our view, the primary reason stocks are drifting higher and shifted into the hands of buyers (half full) — that is, the market was overwhelmed with sellers, causing the fastest crash ever. So we think risk/reward still favors buyers.