You know it’s serious when the “taverns” close.
Texas governor Greg Abbott on Friday ordered bars shut from noon local time, as the state struggles to “corral” (as Abbott is fond of putting it) one of the nation’s most acute COVID-19 flare-ups.
The same executive order contains a number of additional stipulations, including the following:
- All bars and similar establishments that receive more than 51% of their gross receipts from the sale of alcoholic beverages are required to close at 12:00 PM today. These businesses may remain open for delivery and take-out, including for alcoholic beverages, as authorized by the Texas Alcoholic Beverage Commission.
- Restaurants may remain open for dine-in service, but at a capacity not to exceed 50% of total listed indoor occupancy, beginning Monday, June 29, 2020.
- Rafting and tubing businesses must close.
- Outdoor gatherings of 100 or more people must be approved by local governments, with certain exceptions.
The order cites the rising caseload, the surge in hospitalizations, and a positivity rate in excess of 10%. Previously, Abbott warned that a double-digit rate would likely prompt “further preventative action”.
Hospitalizations are up 14 days in a row. On Thursday, reports indicated that Houston is out of (or nearly out of) ICU capacity.
“At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars”, Abbott said Friday.
Forgive me, but: Imagine that, Greg!
The actions in this executive order are essential to our mission to swiftly contain this virus and enhance public health. We want this to be as limited in duration as possible. However, we can only slow the spread if everyone in Texas does their part. Every Texan has a responsibility to themselves and their loved ones to wear a mask, wash their hands, stay six feet apart from others in public, and stay home if they can. I know that our collective action can lead to a reduction in the spread of COVID-19 because we have done it before, and we will do it again.
Let’s not kid ourselves, folks. This is a partial lockdown. It is an incremental step back towards closing down the state.
That doesn’t mean the state will be closed back down, but it does mean that economic activity will be impacted for the duration of these newly reinstated mitigation measures.
If enough states take similar action (and you have to believe Florida will be forced to take additional steps soon), the recovery narrative at the national level will take a hit.
Importantly, it’s worth noting that other states which hadn’t yet relaxed restrictions or moved as far along the road to reopening as Texas and Florida are now beginning their own push to normalize.
Assuming we don’t see flare-ups in the reopening “laggards” (as it were), the effects in terms of the national economy could offset, as activity comes back online in the “old hotspots” even as it’s temporarily offline in the “new” ones.
But that’s a delicate balance. And it’s not one that anyone wants to bet on when it comes to trading, that’s for sure. Equities and risk assets recoiled on Friday morning when the Texas news hit.
Insult was added to injury when Florida reported the biggest daily increase yet, at 8,942. That represents a 7.8% spike, double the 7-day average.
I’ll leave you with one final chart which tells the story.