Is a Covid-19 Second Wave Coming to the U.S.?
Originally published June 17, 2020
Hearing a lot in the media lately about a potential second wave of the virus. There is always the possibility of that, but that is not what the fundamentals and the financial markets are communicating to us right now.
I have put together a predictive package together that is a part of our quantitative analysis that provides a pathway forward to improve your financial performance. To learn more about my Business Analytics Solution, click here.
As you can tell from my analysis of the Covid-19 daily cases data (see chart below), daily cases peaked around the end of April and have been declining every since. Our 7-Day Moving Average has been trending down since the middle of May. The 7-Day Moving Average is also below the median of past 90 days of daily cases. All of this points to a stabilization of the viruses impact. So a second wave is definitely not here for now.
Personally, this is a tough graph for me to put together. It is just horrible looking at all of these deaths. But the bright side here is that Covid-19 related deaths are significantly down. See chart below. At the height we had over 2,500 deaths on a daily basis. Now, we are down to less than 500. This is good news on many fronts.
Next I took a look at the services sector of the economy, because it account for ~80% of GDP of our economy. That reading did improve in May. See the chart below. This reading of 45.5 points to a -1.1 % decline in GDP, but compares favorably to the 41.8 level in April which corresponds to – 2.3% decline in GDP. So, the services sector of our economy isn’t responding like there is a second outbreak happening.
When I look at another fundamental index, Consumer Sentiment, it did show some improvement after declining both in March and April. So, consumers are becoming slightly more positive about the economy.
Lastly, I want to take a look at one of the most important leading economic indicators to shed some light on this subject. The Standard & Poor’s 500 stock market index is forecasting further improvement in the economy 6 to 9 months out. Granted the market is trading in a range or is consolidating, but the consolidation is upward. So, as for now, the financial markets are not forecasting a second wave of Corona virus. You would say that the market is cautiously optimistic.
In summary,
- Covid-19 cases in the United States are currently stable;
- Covid-19 deaths are way down and continuing to trend down;
- The Services Sector of our economy is improving;
- Consumer’s outlook is improving slightly;
- The stock market is forecasting an improved economy over the next 6 to 9 months. The market is cautiously optimistic that we will not experience a second outbreak over this period at this time.
“We use analytics on your work and business processes to gather the critical insights that you need to impact your business performance.” Click here to schedule a complimentary discussion session about how Robinson Analytics can help you. To learn more, you can access his website at www.robinsonanalytics.com.