Financial Insights


United States
There is some evidence that case growth declines in the US may be stagnating and perhaps reversing in a couple of states but it is less clear whether true cases are actually increasing. Evidence is much more mixed. Simply tested positives are increasing but real positives may not be increasing. Hospitalizations and deaths are flat to lower even in states where cases are increasing. But this is a lagging indicator. Nonetheless there is an increase in cases especially over the past 10 days. Look below for the new state heat map.

  1. The percent testing positive has flattened out a bit around 5.5% for the past week rather than continuing its decline, although the 7 day moving average is still 15% below a week ago. This had been declining by 20%+ week over week.
  2. The 7 day moving average of cases has been climbing again in Georgia, Alabama, California, Maryland, North Carolina, Minnesota, and Alabama.
  3. California has had the largest increase, although deaths have remained roughly flat. Hospitalizations have also remained flat to lower in CA, although this may lag case growth.
  4. Looking at the US data more broadly on a 7 day rolling average basis there appears to be a worsening of trends in the US: There are 16 states that have cases growing over 20 cases per day. However only 9 days ago 5 states had cases growing over 20 cases per day.  There are 12 states that have cases declining by over 20 cases per day. However only 9 days ago 24 states had cases declining by 20 cases per day. There are 23 states whose case counts were neither increasing nor declining by 20 cases by day

**Over the holiday weekend there were substantial pockets of missing data from many states so the data should be considered incomplete. For example, in Texas, only 23 out of the largest 53 counties reported case data on Sunday. In New Jersey only 15 out of 21 counties reported case data on Sunday. This will catch up at some point, but this is skewing the data lower for the past few days. Some counties may have stopped reporting on weekend’s altogether so it is possible there will be a larger correction in the early part of this week and that this will increase cases and deaths.  Interesting new website that tracks potential for states who are ready to Test & Trace:
Despite case growth increasing in some states, deaths and hospitalization data does not yet suggest an increase in the actual number of actual cases.

United States Forecast Summary
• The total case count forecast range in the US has remained the same from a week ago between 1,800,000-2,000,000 by mid-June. There are nearly 100,000 deaths and the forecast for total deaths by mid-June remains between 110,000 and 120,000.
• Projected number of deaths for August 1 remains between 130,000 and 200,000.
• The case fatality rate (CFR%) forecast has now decreased to 5.7% as the forecast now has a peak followed by a slow slight decline.

• While global cases are growing there is an increasing split. Developed countries are largely improving while a larger number of developing countries are getting worse.
• Europe has improved tremendously and continues to bring cases down moderately.
• Global case count has set new records over 100,000 cases/day. Russia, Brazil, India, UK, Peru, and Mexico have been experiencing high case counts with Brazil hitting over 20,000 cases in a day recently. Bangladesh, Peru and other poorer and more densely populated countries have not been able to contain the virus spread and may continue to see an increase in cases. Much of South America and a fair amount of the Middle East have experienced steadily climbing case counts.
• Sweden, whose economy has remained open, continues to keep cases in the 300-800 range daily and has been steady in case count for nearly 2 months.  Economically speaking Swedish citizens don’t look like they have behaved all that differently from countries which formally shut down – Results from a study from McKinsey:
• An increasing number of countries have reduced case counts to close to zero.
• Cooler “fall” weather is unlikely to be contributing to the growth of cases in South America. Temperatures across much of South America remain close to 80 degrees.
• Most developed countries which have reopened have done well with cases mostly continuing to fall. So far case growth in Austria, Czechia, Denmark, and Norway have remained low and have even continued to trend lower.
• No evidence of a second wave emerging in Europe or Asia at all.
• A few countries are experiencing early signs of a second period of increase including Iran, but these are rare. Even Iran is not really a second wave yet, but their numbers are slowly increasing again.
• Given the early successes so far of Sweden, Austria, Czechia, Denmark, and Norway there is increasing evidence that may be able to re-open the economy responsibly by following the frameworks demonstrated by these and other European countries. This does not suggest a total return to normalcy but instead that responsible and calculated openings can be effective without risking a major second wave.

There is increased risk in Days 70+ that case growth will accelerate with all of the opening in the US. For now the base case forecast assumes ongoing moderation based on responsible individual behavior regardless of state economies opening.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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