The Dividend Cafe - Covid and Markets - Tuesday September 15

Episode Date: September 15, 2020

COVID Health Information • The seven-day average of 34.7k new daily cases is down 48.4% from the July 22 peak. • The BioNTech/Pfizer vaccine project has said they believe it is “likely” their vaccine will be distributable before the end of the year. They obviously cannot predict what the FDA approval process will look like but there seems to be a lot of confidence in the direction of their vaccine trials. They recently expanded their trial pool from 30,000 to 44,000. • Madrid’s hospitalizations through the so-called “second wave” of Spain are 1/7th (14%) that of what they were in the spring. I hate being so redundant with you but often the news itself is redundant. The cases are less severe, the people are healthier, the treatments are better, and so forth and so on • New cases in Denmark have tripled, whereas in Sweden they have barely moved. As for what could possibly be causing this dynamic, I guess I would refer you to:all the media reports covering this prior issues of COVID & Markets. • JP Morgan has determined that productivity does, indeed, fall for employees working from home. In other news, I have determined that the sun is hot. • The University of Pittsburgh School of Medicine has a promising development you may want to read more about. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Hello and welcome to today's COVID and Markets podcast brought to you by the Dividend Cafe of the Bonson Group. We have a short but sweet one today. I have been in Connecticut all day today in client meetings, and there's a few things I want to be able to cover, but it's not quite the same normal amount of data and information we might have. Look, the seven-day average

of new cases, 34,000 plus change right now, as far as new daily cases, that's the seven-day average of new daily cases, is down 48.5% from the July 22nd peak. So that case growth that so many want to obsess on continues to drop with astronomically higher testing, even as the positivity rate now has dropped back into the 4% to 5% range. I don't have Tuesday's positivity rate yet as I'm recording. Maybe I'll get it by the time I'm done recording. But yesterday's Monday was only 4%. So we're dealing with just very, very low positivities or declining. I will point out a couple things quickly before I go to the market.

That BioNTech Pfizer vaccine project, many believe to be in the lead for final approvals, lead for final approvals, has said that they believe it is likely their vaccine will be distributable before the end of the year, before the end of the calendar year. They obviously can't predict what the FDA's approval process will look like, but for them to say that, it seems to be indicating a lot of confidence in the direction of their clinical trials. They did expand their trial pool from 30,000 people in the U.S. to 44,000. So there's a lot of things going in the right direction there. We'll continue to monitor that and all the other vaccine cases. Madrid's hospitalization, speaking of that second wave, quote unquote, in Spain,

their hospitalizations are one seventh of what they were in the spring, 14%. So I don't want to be redundant here any more than I have been over and over with the various Sunbelt states and Southern states and so forth. But I think that the cases in Spain sound to me like they are less severe than they were in the spring and or the people sound healthier who are getting it and or the treatments that we have available now seem to be better, so forth and so on. There's a chart at COVID markets you really have to see where you can see that new cases in Denmark have tripled. Now, they still have a very, very low mortality rate out of, thank God. But I also want to point out that not only do they have virtually no mortalities in Sweden, but that the cases which have tripled in Denmark have barely moved.

So I'll let you look at the chart and determine on your own what could be causing that. A great report from JP Morgan, productivity of their employees working from home and why they are accelerating the return of people back to the office. There's a link for such in COVID and markets. I commend to you. University of Pittsburgh School of Medicine. There were about four other scientist groups and medical groups, part of the peer review on this.

With a very promising development, I did provide the medical journal link at COVID Markets, but essentially they've isolated the smallest molecule, the smallest biological molecule to date that neutralizes the virus. They've been doing significant animal testing thus far, which has been highly successful. More trials are underway, but there would be a kind of therapeutic path here, as well as a potential vaccine path on the antibody side, depending on how this plays out. Let me add a couple other comments before I go into the market. California's positivity rate today is 1.8 percent lowest it's been um obviously that's less than half of what

the country's very low positivity rate is and you know depending on how you look at things i mean there's a one to three percent assumed false positive rate so 1.8%, you could argue that there's just very little positive cases going on right now in California at all. I think it's very good news, and hopefully the policy treatment around all this will kind of match the really good news on the ground. On the market front, the Dow was kind of flat today, up a couple points. The S&P was up half a percentage point, though, and the NASDAQ was up even more. So kind of another one

of those days where each index having a mind of its own. Yesterday's rally in the markets, though, it's really important for me to point out that it was the highest amount of breadth that we've had in advanced to decline ratio in the S&P 500 of 82%. So, you know, we were getting 90% plus days back when the market first started rallying post-COVID in April or so. But this is the highest amount of breadth in over two months and is encouraging for short-term market watchers. A couple other short-term signals, copper at new highs and the dollar at new lows. There are, on the public policy front now, junior congressmen and women on both sides of the aisle that are pushing for a relief bill. This sort of bipartisan congressional group trying to get a deal done proposed a one and a half

trillion dollar spending package today um the white house then kind of surprised me by saying they could get behind this framework and speaker pelosi who's not behind it but again if you're going to have a bipartisan support for this uh it will be it will put speaker pel Pelosi in a difficult position. There are more tidbits I want to share with you about the Fed and about oil markets, but I'm going to encourage you to go to COVID and Markets to check that out. Bottom line on oil, the IEA cut their Q4 demand forecast down to 600,000 barrels a day. And also the OPEC had cut their consumption outlook for next year down to 1.1 million barrels per day. Both these were a little lower than been expected.

And yet oil prices traded up today back above $38 a barrel. Why does oil go up on news like this? I think that oversupply relative to soft demand is just not news to the market. It's well known and priced in, and that's where you're getting these kind of high 30s and low 40s around oil prices. So let me leave it there for today. I apologize for the quicker podcast, but we want to get this in, let you digest it, and we'll come back Thursday with another COVID and Markets Missive. Thank you for listening to COVID and Markets brought to you by The Dividend

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