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COVID-19 cases are dropping like a rock: Morning Brief

In this article:
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In Wednesday’s Morning Brief, Myles Udland writes about how the improvement in coronavirus data has been overlooked by investors, and how even though the pandemic remains a very bad situation, it is getting better.

Video Transcript

JULIE HYMAN: Because Myles this morning in his Morning Brief wrote about the rally we've been seeing in stocks and sort of this sneaky improvement that we've been seeing in the coronavirus numbers, Myles, essentially that we've been seeing a big drop in the rate of new cases across the country. That has not been getting as much attention.

I mean, this is even as, yes, we've got vaccine deployment that is now stalled out a little bit by the same cold weather that's affecting the power situation in Texas. That's really affecting vaccine deployment across the middle of the country. But we know, in general, vaccines have been speeding up. And it seems like people actually changed their behavior for a little while at least that is leading to this decreased case count.

MYLES UDLAND: Yeah, and I mean, look, I don't think that anyone thought we were going to see 300,000 cases per day indefinitely. But if we look at the numbers over the last 24, 48 hours, yesterday, we reported about 64,000 cases here in the US, new COVID cases. Obviously, because of the winter weather, you're going to see new cases, I think, depress a little bit.

But we've been trending below 100,000 for really the last couple of weeks. But yesterday's number is the lowest weekday total that we've seen since mid-October, October 21, by my count there. We had 55,000 cases on Monday. Granted, that was a holiday. That's the lowest since October 17. That was a Saturday.

So again, all the comps here kind of creates some distortions. But the overall trend very clearly down and to the right. Hospitalizations, very encouragingly, they're down about 50% from their peak back in the beginning of January. And again, as you mentioned, the vaccine rollout, that continues. Many estimations now put the number-- or the percentage of citizens who have contracted COVID-19 at around 30%.

Combine that with the vaccination rate as a percentage of the population, and you're looking at about 40% of the US population that's either been infected or inoculated. And so we are starting to see that effect as well within the numbers. The guidance around the holidays was, don't travel, don't gather with friends and family.

The numbers that followed Thanksgiving and then the Christmas holiday, especially New Year's, suggested that that guidance was not followed. So we're seeing that work itself off as well. And I think, again, the markets have expected there to be an improvement in this data. We got that retail sales number today. We had been expecting, again, that the economy would get better.

But I think all of this just shows, and again, it's a point we made in the piece and it's a point we've tried to make a lot here on Yahoo Finance, the market and investors are focused on the rate of change, the direction of change, not the absolute level. 55, 65,000 people contracting COVID-19 every single day in the US is the kind of number that would have been absolutely mind-blowing if you had told us this back in, forget about February 2020, even in April of 2020, that seemed like an unacceptably high number.

Well, things have changed. And that is now a dramatically improved number. For better, but I think probably for worse. And so the market is focused on, is the COVID situation getting better? Directionally, it is. And that continues to create this backdrop against which general bullishness and enthusiasm towards financial assets in the economy and so forth continues.

BRIAN SOZZI: Myles, you mentioned the retail sales report. Do you think that is the first indication of what might happen as more people get vaccinated? I'm trying to figure out, does that report-- does it just reflect the stimulus checks or is that just people that have maybe gotten vaccinated, they're starting to venture back out into the wild and maybe it's starting to show up in some of the economic data.

MYLES UDLAND: So, you know, I go back to that report. Bank of America did it, I think it was maybe earlier this month or late last month, and it showed how much of the stimulus money that had been distributed had already made its way into the economy. And the trajectory from the most recent $600 stimulus check was dramatically higher than from the $2,000 check that we saw, or $1,200 check, I guess, back in the spring.

And so I think-- I suspect, personally, I'm interested in your guys' thoughts on this, I suspect it's really about the check. I think the COVID trajectory certainly helps. I think, and we were chatting about this in our Slack channel, in a lot of the rest of the country, people are kind of done with, like, follow the rules, I guess, maybe. But the rules are different.

And I think there's-- in New York City, in the New York City area, it's like, oh, well, when restrictions ease. In most places, it's already over. Like, the game is kind of over, people are done focusing on it. So I think that also plays an impact as well. But I would say that the marginal impulse that created such a big change in January was probably the stimulus checks more than anything else.

But I do think Sozzi brings into play that right tail scenario of 8%, 9%, 10% economic growth where the Street, I think, is still looking for 2%, 3%, 4%. And I just think that number is going to get blown away.

JULIE HYMAN: Yeah, I guess we'll have to see. The stimulus thing will become more clear. We'll have to watch the forward months data, right, and see if this continues in the coming months. I've been consistently surprised by the fact that according to the Bureau of Labor Statistics, less than a quarter of Americans are working at home because of the coronavirus.

I've been really surprised that that number has consistently been so low, which, again, speaks to what you're talking about, Myles, that we're sort of still in this corona bubble that a lot of the country is not in.