Is the Risk of a Second Wave of Infections Rising?
Presented By Kevin Taylor and Kyle Taylor
Over the past week, we’ve had some good news in that there hasn’t been any sign of a national second wave of infections. In fact, the spread rate dipped below 1 percent for the first time on two days, and case growth seems to have stabilized to around 20,000 per day. On the other hand, we’ve also had some bad news. Several states are seeing local second waves, with case counts rapidly on the rise. For now, those increases have been offset by improvement elsewhere in the country, as they’ve been severe at the local level but haven’t translated to a national level. This situation is something we’ll need to keep an eye on, as a further increase in case counts in the affected states or a slowdown in improvement in the other states could reverse the trend.
The other outstanding question, whether the recent wave of public protests will generate a wave of infections, is also something to watch. We won’t know the answer for another couple of weeks, and this possibility is something we must keep an eye on through June.
In some good news, the reopening is still on track as consumers move back into the economy. Last week's jobs report was a major positive surprise. It suggested that employment, while still very weak, is much better than had been thought. Mobility and restaurant demand have continued their substantial improvement, and auto sales have bounced back strongly. Consumer and business confidence also appear to have bottomed and started to recover.
After a slowdown in testing growth, as well as questions about the underlying data, the news here was also better last week. Testing moved back up and the rate of positive tests stayed low, suggesting that the data continues to trend favorably.
Overall, from a medical perspective, conditions continue to remain positive, although they are deteriorating in some states and risks are rising. From an economic perspective, the news is good, as the reopening is proceeding smoothly. Let’s take a look at the details.
Brad McMillan, CFA
, CAIA, MAI, managing principal, chief investment officer, at Commonwealth Financial Network