Covid Markets Missive – Weekend Edition Sept. 13

Dear Valued Clients and Friends –

Because Friday’s Dividend Cafe was “election white paper” focused, I did not get to share appropriate 9/11 comments.  I did make a few comments here as I walked through the city Friday, and I think those two photos my wife took from a sailboat we were on Friday evening around Lower Manhattan captured plenty.


The market provided more volatility last week than the COVID news did, and I certainly wish that will be how things stay (markets are inherently volatile; the COVID news has become quite predictable).  But I can’t say for sure if the COVID news will find its way back as a top press priority or not.  Obviously there is always the chance of legitimate stories surfacing that warrant press coverage (and we can all hope nothing like that happens), but thus far it does not seem there has been a ton of traction (in markets or media) for “cases” – as the lack of accompanying severities seems to have dampened the opportunities for sensationalism around such.  Of course, I could be guilty of wishful thinking here.  Off we go …

COVID Health Information

  • The massive drop in hospitalizations since the July peak nationally, the continued decline down in average mortalities (despite continued backlog/surveillance additions), and the future decline in mortalities that the present decline in hospitalizations surely foreshadows, are all very encouraging.  More on what all this may mean below.

  • A new research paper (available by request) published by doctors from the Vaccine & Infectious Disease Division of the Fred Hutchinson Cancer Research Center in Seattle, as well as the Emory University School of Medicine, both of whom are members of the COVID Prevention Network and NIAID Clinical Research Consortium, shedding much light on the extreme unlikelihood of reinfection for those with even extremely minor exposure to the the COVID-19 virus, and more importantly, reinforcing the protective immunity those with prior exposure to certain common cold coronaviruses are suggested to have.  Their work supports the belief that memory T-cell protection may be at play for a substantial portion of the population, too, suggesting “40-50 million people in the U.S. may have been already been infected with a detectable serological response to SARS-CoV-2.”
  • AstraZeneca and the University of Oxford reiterated they DO still believe a vaccine will be available by the end of this year even after this week’s trial pause after one isolated neurological response question.  Unpacking what happened with this participant does create a delay but appears to not be a stopper.  The trials have now resumed, by the way, as the Medicines Health Regulatory Authority confirmed it was safe to do so.
  • Unforgivable media malpractice in ignoring this story:

  • A national breakdown of the percentage of hospital capacity being taken by COVID-related patients:

  • The Big-10 conference is set to vote tonight (or tomorrow) in what is expected at press time to be a reversal of their prior decision to cancel fall football.  The backlash has been huge, and if this does go through as expected, it would leave the Pac-12 as the only major conference cancelling the football season.
  • Tragically, 266 hospitals have announced plans to furlough staff citing the economic fallout of COVID-19 (as elective surgeries and other health care needs were banned in anticipation of a much higher COVID care need than ended up being the case).  Vacant beds are above historical averages as COVID discharges have ramped up.

* Pantheon Macroeconomics, Sept. 11, 2020

  • Today’s testing data shows over 763,000 tests done yesterday, with a positivity rate of 4.8%. (Sunday results seem to be quite delayed).

Key State Info

  • Florida
    • The decline of daily mortalities has been something to behold and even with daily backlog deaths are really, really fading (thank God).  They reported just ten today (note the current gray area of the chart below).

  • New York
    • Goldman Sachs has joined the group of patriotic, socially-responsible companies bringing their employees back to work.  And JP Morgan, already bringing back their deal teams to London and NYC offices, is now bringing back traders as well.
    • This covers the whole northeast, not just New York, and it sure seems like the lack of case growth in the northeast where cases had most exploded last spring is suggesting something encouraging.

  • California
    • Hospitalizations down another 200 the other day, with COVID positive patients being a grand total of 4.4% hospital capacity in the whole state
    • As far as LA County goes, where the day after their Public Health Commissioner said twice on radio that they would keep schools shut until “after the election” they announced a shut down “through January,” total COVID hospitalizations are currently at 877 people (population: 10.1 million), down from 1,538 from one month ago by nearly 50%, and down from July 12 by over 58%.
    • And then for those wondering how California is doing economically, note the latest report from the Department of Labor on NATIONAL continuing unemployment claims broken down by state.  Pretty close to 50% of the nation’s claims in, ummmm, one state.  May want to think about accelerated re-opening, Governor.

  • Texas
    • Now how about Texas’ hospitalizations?  COVID hospitalizations are down over 69% since the July 22 peak.  The total hospital beds being used by COVID patients in Texas is now below 6% …  Yep, 5.9% – lowest since June 20.

  • Minnesota
    • I can’t recommend this article enough in trying to unpack not only the science of testing and where some of the nuances lie, but also what it has meant to the real data in the great state of Minnesota.  The CDC, by the way, there is not an active virus below 32-34 cycles.

* Worldometers.Info, Sept. 13, 2020

Public Policy

I remain of the opinion that a new “relief” deal is not coming, but more and more reports are coming my way of moderate House Democrats asking Speaker Pelosi to proceed making a deal happen.  My opinion has been that the Speaker feels she can just wait it out until after the election; one of my most trusted and intelligent sources in the hedge fund community believes the exact opposite here.  So I stay humble in my reading of the tea leaves, watching day by day for any hints of change.

Oil and Energy

Crude inventories rose 2 million barrels this week as opposed to an expected draw of 1.35 million barrels, providing the most logical explanation of the drop in crude prices.  This was the first week where stockpiles grew vs. the opposite in seven weeks.


Futures are up over 130 points on the Dow …

Be well, be safe, be free.

With regards,

David L. Bahnsen
Chief Investment Officer, Managing Partner

The Bahnsen Group

This week’s Dividend Cafe features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet.


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About the Author

David L. Bahnsen


David is a frequent guest on CNBC, Bloomberg, and Fox Business and is a regular contributor to National Review and Forbes. David serves on the Board of Directors for the National Review Institute and is a founding Trustee for Pacifica Christian High School of Orange County.

He is the author of the books, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (Post Hill Press), The Case for Dividend Growth: Investing in a Post-Crisis World (Post Hill Press) and his latest, Elizabeth Warren: How Her Presidency Would Destroy the Middle Class and the American Dream (2020).


and receive periodic updates from COVID and Markets