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Too fast or too Soon

"Extreme patience combined with extreme decisiveness.” - Charlie Munger

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 38% from its bottom and is now down (3.5%) 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 remained the same this past week. Growing at a daily average rate of 1.6% over the last week, while the number of people tested continues to trend higher with a daily average of 489,502 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

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 testing and the population at large wearing masks, growth in confirmed cases peaked at over 200% when the market set its 52-week low, March 23rd.

Nationally, the numbers are encouraging. 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.  



Kevin T. Curran, CFA
 President & Chief Investment Officer

Curran Investment Management® is Defining Quality®

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 or contact Curran Wealth Management if you have any questions.
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