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Rising Rate

“Never confuse a single defeat with a final defeat.” – Carl von Clausewitz

On a weekly basis we are updating our chart plotting the growth rate in Covid-19 against the price of the S&P 500.  The market has been rallying for weeks after setting its 52-week low March 23rd and remains in a confirmed uptrend despite the pullback in the market June 11th.  The S&P 500 has risen 39% from its bottom and is now down (3.0%) on the year.

The chart below illustrates the price movement in the S&P 500 against the growth rate in the CDC’s reported number of Covid-19 cases.  Indicated by the chart’s red line, the daily national growth rate in Covid-19 has risen this past week.   Growing at a daily average rate of 2.0% over the last week, while the number of people tested continues to trend higher with a daily average of 543,836 for the period June 22nd–26th.  The Atlantic has organized the Covid Tracking Project which charts Covid-19 tests nationally (https://covidtracking.com/data/us-daily).

Source: FactSet financial data and analytics

Against this backdrop the S&P 500 remains in a confirmed uptrend.  While more progress needs to be made battling the virus, such as greater acceptance of wearing masks and social distancing, growth in confirmed cases peaked at over 200% when the market set its 52-week low, March 23rd.

Nationally, the numbers are encouraging.  For instance, the death rate and ICU (intensive care unit) admittances have declined significantly and in future updates will be evaluating the data.  Digging deeper there is concern that some states have opened too fast, too soon.  Evaluating some states such as Arizona and Texas, where growth in the virus has increased and hospitalizations are rising.

It’s uncertain how long this pattern will continue.  In our humble opinion the declining growth in cases along with the extraordinary measures taken by the Federal Reserve Bank have been driving the market higher these past months.  We understand the concern that there is a Covid-19 resurgence in places that have opened more quickly than others.  As other regions of the nation continue to reopen, we will check for the slowing spread of Covid-19, as the S&P 500 progresses higher, retracing its losses.

Sincerely,

https://static.twentyoverten.com/5a4258bbacdea1742455dc1d/lcyhGyDmsIx/1554930607886.png

Kevin T. Curran, CFA
 President & Chief Investment Officer

Curran Investment Management® is Defining Quality®

Please check with your Curran Wealth relationship manager,
or contact Curran Wealth Management if you have any questions.
 518.391.4200 •
 info@curranllc.com

The material contained in this article is for educational and informational purposes only.  The information herein is considered to be obtained from reference sources deemed reliable, but no representation or warranty is made as to its accuracy or completeness.  This article is not, and should not be regarded as “investment advice” or construed as a “recommendation” or an offer to buy or sell a security.  The information contained in this article may not apply to your personal circumstances.  Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation.  Information on taxes is based on the tax laws existing at the time of publication.  Tax laws are subject to continual change.  In addition, tax laws vary by state.  This article is not, and should not be regarded as tax or legal advice.  We cannot ensure tax consequences of any transaction.  If you would like a detailed analysis of your tax situation, with specific tax recommendations, you can discuss the possibility of pursuing a formal relationship with Hippo Tax Services, LLC.