In previous notes we mentioned the possibility of a “Second Wave” of cases popping up as activity resumes and social distancing measures are relaxed. In the last week cases have begun to rise across the nation, particularly in states that until recently have not seen a huge case load from the virus. The increase itself was to be expected but the severity of new case growth is still alarming. On June 26th the United States reported a new record in daily COVID-19 cases, most of which came from southern and western states. The encouraging sign from recent data is that so far daily deaths have not kept up with the pace of new cases. This implies that treatments are improving dramatically and testing remains robust. Keep in mind new deaths tend to lag cases so we remain hopeful that the fatality rate continues to fall.
Also encouraging is that households have remained very resilient even with very weak macroeconomic/employment data. The majority of consumers (77%) continue to think their own finances will get better or stay the same over the next six months. A lot of this is most likely due to fiscal and monetary assistance which has been very supportive, but a second round of stimulus aide may need to be enacted after current ones run out.
A vaccine is still being touted as the cure for the COVID pandemic but the further along we get and the more people that get infected, herd immunity may take hold before a vaccine is finished. And although we don’t doubt the innovation abilities of large drug makers, we think expectations for a vaccine before the end of the year need to be hampered. Vaccines are being developed by companies all around the world with several already in the clinical trial phase which is very fast compared to typical timelines. But even with this fast tracked timeline, a vaccine before the end of the year would be very ambitious and the drug’s safety, effectiveness, and timeliness are not guaranteed.
We continue to monitor these developments and will keep you updated as new information becomes available. Please feel free to reach out to us if you have any questions or would like to discuss these matters further.
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