Underlying Concerns

“Optimism is the faith that leads to achievement.  Nothing can be done without hope and confidence.” – Helen Keller

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 23^rd and remains in a confirmed uptrend despite the pullback in the market June 11^th.  The S&P 500 has risen 40% from its bottom and is now down (3%) 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 declined this past week.   Growing at a daily average rate of 1.6% over the last week, while the number of people tested remained more or less the same with a daily average of 453,988 for the period June 8^th – 12^th.  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

Nationally, the numbers are encouraging and illustrate a modest improvement.  Digging deeper there is some concern when evaluating some states such as Arizona where growth in the virus has increased and hospitalizations are rising.   However, some states noted for a rise in Covid-19 cases, appear to be the result of greater testing rather an increased growth rate in the virus.  Against this backdrop the S&P 500 remains in a confirmed uptrend.  While more progress needs to be made battling the virus, such as even greater testing, growth in confirmed cases peaked at over 200% when the market set its 52-week low, March 23rd.  

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 weeks.  We understand the concern that there could be 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.

Sincerely,

Kevin T. Curran, CFAPresident & Chief Investment Officer

Curran Investment Management® is Defining Quality®

Please check with your Curran Wealth relationship manager,or contact Curran Wealth Management if you have any questions. 518.391.4200 • info@curranllc.com

The material contained in this article is for educational and informational purposes only.  The information herein is considered to be obtained from reference sources deemed reliable, but no representation or warranty is made as to its accuracy or completeness.  This article is not, and should not be regarded as “investment advice” or construed as a “recommendation” or an offer to buy or sell a security.  The information contained in this article may not apply to your personal circumstances.  Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation.  Information on taxes is based on the tax laws existing at the time of publication.  Tax laws are subject to continual change.  In addition, tax laws vary by state.  This article is not, and should not be regarded as tax or legal advice.  We cannot ensure tax consequences of any transaction.  If you would like a detailed analysis of your tax situation, with specific tax recommendations, you can discuss the possibility of pursuing a formal relationship with Hippo Tax Services, LLC.