Pro Perspectives 9/18/20

September 18, 2020

As we end the week, stocks have continued a September correction, today making lower lows on the month.

This, just days after a very market-friendly Fed meeting.

This looks very similar to June (which also coincided with a very market-friendly Fed meeting).  As you can see in the chart below, we’ve had a 9% correction in stocks in June.  We’ve had a 9% correction this time.

Similar to June, the chatter about rising cases has returned.

Back in June, businesses were reopening, and those going back to work were forced to test.  That did nothing but reveal the degree to which asymptomatic were walking around.  Still, the media and the politicians used it as ammunition to fuel their “respective” agendas.

The result of “spiking cases” this summer:  The rate-of-change in the death-to-cases ratio only declined more quickly as the rate-of-change in testing increased.

This time around, testing has ramped up for back to school.  Again, it’s only revealing the degree to which asymptomatic people are walking around. The death rate-to-case ratio continues to decline.

We’re eight months in since the first U.S. case was recorded.  And the death-to- diagnosed case rate is 2.9%.  If you believe the CDC that at least 10 times as many people have it or have had it (undiagnosed), that death rate falls to 0.29%.   Antibody tests from a July published study in JAMA suggest the multiplier could be as much as 24. 

Add to this, while the absolute number of cases diagnosed might be reaching new daily highs, the trajectory on the rate-of-change in daily cases, as you can see in the chart below, is down.