Rise in US coronavirus cases could unnerve markets at the open, but there are caveats

Big focus on a second US wave

Big focus on a second US wave
The market has turned its focus away from the reopening story and back to the virus; and the risk that even with the economy reopened, no one is going to show up.
The main theme at the moment is rising cases in a number of US states, along with growing cases in Latin America and India.
The US is a complicated picture. New York has drastically curtailed cases, which rose just 0.2% yesterday.
The fear is that numbers continue to climb elsewhere. Yesterday, total US cases rose 1.4%, which was the biggest jump so far in June. There are a handful of states showing an acceleration. Here’s a short list, with the % increase in cases yesterday:
  • California +2.3%
  • Texas +2.3%
  • Florida +3.6%
  • Louisiana +2.9%
  • North Carolina +3.4%
  • South Carolina +4.6%
  • Arizona +4.9%
Those are some of the most-populous states in the country but there are some important things to keep in mind. Florida, for instance, has 73.5K cases total, which is a fraction of the 382K in New York.
The weekend headline that got the most attention was the jump in Florida cases to 2581 from the previous day (also a record) of 1902. That looks like a dangerous escalation but Florida Governor Ron DeSantis has downplayed the rising totals, saying it reflected increased testing, isolated outbreaks in long-term care facilities along with more testing at prisons and among migrant farm workers.
Other virus news:
  • Iran on Saturday also reported 107 new deaths, which was its highest in two months.
  • Beijing locked down part of the city due to an outbreak
  • Saudi Arabia reported 4233 cases on Sunday, a record high
  • Tokyo reported 47 cases, the most since May 5. About half were traced back to nightclubs
  • Globally, the WHO reported 142,672 new cases Saturday, a record
  • UK stores are set to reopen on Monday
Overall, the virus theme is beginning to overwhelm the easy-money theme and fear is starting to creep back into markets. The bounce late on Friday was constructive but I expect we will start the week with a negative tone.
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