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Underlying Concerns

“Optimism is the faith that leads to achievement.  Nothing can be done without hope and confidence.” – Helen Keller

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 40% from its bottom and is now down (3%) 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 declined this past week.   Growing at a daily average rate of 1.6% over the last week, while the number of people tested remained more or less the same with a daily average of 453,988 for the period June 8th – 12th.  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

Nationally, the numbers are encouraging and illustrate a modest improvement.  Digging deeper there is some concern when evaluating some states such as Arizona where growth in the virus has increased and hospitalizations are rising.   However, some states noted for a rise in Covid-19 cases, appear to be the result of greater testing rather an increased growth rate in the virus.  Against this backdrop the S&P 500 remains in a confirmed uptrend.  While more progress needs to be made battling the virus, such as even greater testing, growth in confirmed cases peaked at over 200% when the market set its 52-week low, March 23rd.  

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 weeks.  We understand the concern that there could be 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

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