Pro Perspectives 6/25/20

June 25, 2020

With "cases spiking,” let's take a look at some charts. And then I have some very interesting commentary from a Florida hospital leader that offers a more sober reality relative to the media end-of-the-world hysteria.   

First, here's the chart of daily new cases in Florida …

As you can see in the chart above, the daily infections (new cases) are more than triple the numbers of April and May. 

Here's the positivity rate in Florida.  It's going up. 

 
What about deaths?  Deaths have remained stable to lower. 
 
But, of course, any changes in deaths would lag new cases by a couple of weeks.

With that, let's hear from the front lines on what this rise in cases looks like. 

On Tuesday, the head of Orlando Health, a network of Central Florida hospitals did a press conference with the Florida governor.  Here are four very important takeaways: 

1) First, as the governor said, the median age of new cases is 35 in Florida.  Early in this crisis, it was low 60s.  [my comment: As we discussed yesterday, as young people are being forced to test before returning to work, we're beginning to see how expansive the asymptomatic population might be.] 

The remaining points were made by the hospital exec: 

2) Hospitalizations are rising, but it's in part to their treatment protocol (Remdesivir) which is an infusion therapy and it requires a long hospital stay to complete the therapy.  Hospitalization numbers are reported as current, not new daily changes, so the longer stays results into higher numbers.  As he said, "there is an impact to the numbers that accumulate, as far as our inpatient count."  

3) "20% of the COVID positive patients in the hospital were in the hospital for things completely unrelated to COVID. It could have been a broken leg, it could have been a gunshot wound." [my comment: more asymptomatics]

4) Finally, and most importantly, the hospital exec said, back in April 50% of their COVID patients were on ventilators.  Today, it's just 3%.

So, we have some context for the data.  With this, we should expect expect cases to continue to move higher.  We should expect many, many more asymptomatic case diagnosis as young people continue to be forced to test (work, school).  We should expect the hospitalization rate (relative to cases) to plunge.  And we should expect daily deaths to continue to follow the trend of decline.  

Now, let's talk about the nice recovery in stocks today. 

There are plenty of algorithmic trading firms that have machines trading on headlines.  They seem to locked and loaded for "cases spiking."  But after the dust settles, in a zero interest rate world, when excess money is sloshing around, money will continue to move into stocks, and dips are buying opportunities. From those that watch technicals, the S&P 500 held perfectly into the 200-day moving average.