“We need to close down again in Florida”, Rep. Donna Shalala, whose district includes Miami-Dade County, told ABC on Sunday. “It’s terrible”, she said of the state’s coronavirus outbreak, calling the idea of reopening schools “ridiculous”.
Shalala was Health and Human Services Secretary under Bill Clinton.
The state reported 12,478 new cases. It was the fifth consecutive day with more than 10,000 new infections. The total is now in excess of 350,000. As of Sunday afternoon, dozens of Florida hospitals were reportedly out of ICU beds. Reports from some locations indicate a “desperate need” for Gilead’s remdesivir to treat patients. “[The] initial shipment did not meet the incredible need we have for this live-saving drug”, Florida Hospital Association interim president Crystal Stickle said, in a statement.
On the bright side, fatalities slowed in the state.
In California, cases rose 9,329, the state said Sunday. Los Angeles Mayor Eric Garcetti told CNN the city is “on the brink” of additional containment measures. He did not rule out a new stay-at-home order.
Donald Trump insisted his relationship with Anthony Fauci is “great”, despite myriad reports that the administration has sought to sideline the nation’s top infectious disease expert over the past two months. The White House distanced itself from an inflammatory Op-Ed penned by Peter Navarro last week, but it seems clear that Deborah Birx is the administration’s preferred expert these days.
In a highly unfortunate series of soundbites, Trump told Fox’s Chris Wallace that Fauci is a “little bit of an alarmist”, claimed the US has the “best mortality rate”, and said the country is “the envy of the world” when it comes to testing.
It’s not clear why Trump granted the chat in the first place — Wallace is not an easy interview despite his network affiliation. At one point, he actually asked Trump why he agreed.
Whatever side of the debate you happen to fall on, I’d wager you do not concur with the president’s assessment that any nation is envious of the US when it comes to any aspect of the pandemic. The figure (below) is difficult to get “right” when it comes to quantifying the death toll from military conflicts, so consider it “for illustrative purposes only”, so to speak.
A lengthy article in The New York Times published over the weekend described Mark Meadows’s efforts to divert blame for the outbreak by placing responsibility on states.
“Each morning at 8 as the coronavirus crisis was raging in April, Mark Meadows, the White House chief of staff, convened a small group of aides to steer the administration through what had become a public health, economic and political disaster”, the Times wrote. “Their ultimate goal was to shift responsibility for leading the fight against the pandemic from the White House to the states. They referred to this as ‘state authority handoff’, and it was at the heart of what would become at once a catastrophic policy blunder and an attempt to escape blame for a crisis that had engulfed the country”.
You get the point. It was not a good weekend for news flow on the virus front, but then again, you could have said that about every weekend for months now.
Meanwhile, across the pond, negotiations over the EU’s proposed €750 billion recovery fund were fraught, as expected. Mark Rutte (of the Netherlands) is standing firm on the thorny issue of grants, and he’s supported to varying degrees by Austria and Denmark.
Long story short, Rutte is insistent that the total amount earmarked for handouts (versus loans) be far lower than the figure Angela Merkel and Emmanuel Macron are pushing for. The original plan, unveiled in May, broke the grants down as illustrated in the figure.
Rutte called Merkel and Macron “grumpy” after a failed meeting on Saturday evening. Giuseppe Conte accused Europe’s frugal nations of “blackmail”.
A new proposal from EU Council President Charles Michel cuts the grants to €400 billion and lifts the loan portion to €350 billion, according to an official, but apparently, the sides were not ready to seal the deal as of Sunday evening.
Not to be an “alarmist”, but given that a deal is a foregone conclusion, and considering the combined sway of Merkel and Macron, it would probably be best if the holdouts just acquiesced. The precedent of fiscal burden sharing and a jointly guaranteed fund is now all but set, so bickering around the margins in an effort to squeeze the Italians doesn’t seem like a particularly worthwhile endeavor.
“Whatever the outcome, this is likely to [be] one of the market’s key focuses this week”, SocGen’s Klaus Baader said Sunday. “What little economic data will emerge over the week is expected to confirm the ongoing recovery from the COVID-induced slump”, he added, noting that “euro-area and UK flash PMIs will likely get top billing and break through the 50-breakeven level, but the accelerating rate of new [COVID] infections in the US is endangering the upswing, and not just there”.
And that brings us full circle. With little in the way of data on the docket and the Fed in the pre-FOMC blackout, markets will look to virus developments for direction when it comes to the macro narrative.
The S&P is coming off a third weekly gain, and the Nasdaq will try to recover its swagger after underperforming by the most in years.
While macro data will be in short supply, earnings from a slew of corporate heavyweights will provide fodder for headlines and, potentially, give investors some sense of how management teams are thinking about the outlook.
A quick check of positioning indicators suggests we’re still a long way from anything like euphoria.
In the systematic community, risk parity and vol.-control positioning are still very low (9%ile and 7%ile on Deutsche Bank’s estimates), and CTA exposure to equities looks neutral. Discretionary investors are a bit more committed, but, again, far from all-in.
“The real story should be how on Earth the S&P 500 remains enduringly bid even as worsening economic signals are now the best-case scenario”, AxiCorp’s Stephen Innes said Saturday. “It is a perplexing market that has many traders now ignoring the newsreels in favor of price action alone”.
For what it’s worth, Goldman’s sentiment indicator remains well out of stretched territory, despite elevated levels on the benchmarks.
The bank has warned about the possibility that new lockdown measures may mean the US recovery ends up being less robust than previously thought.
Market participants will be watching developments inside the Beltway this week for any sign that Mitch McConnell is prepared to present a new stimulus plan that’s acceptable to Democrats. Time is running out.
Finally, for those wondering, BofA’s “Bull & Bear” indicator is still flashing a “buy” signal, although we’re well off the contrarian “extreme bearish” territory hit during the worst days of the crisis.
McConnell has to find a way to endear the GOP to the voting majority. Stringing them along to the edge of the abyss and then offering a handout to enable them to continue to scratch out their existence a while longer (to the election) must be handled carefully. And hidden in the handout should be some more cream for the 1%. He is odious period.
“…so bickering around the margins in an effort to squeeze the Italians doesn’t seem like a particularly worthwhile endeavor.” Truer words have seldom been written, sono d’accordo al cento per cento.
Title: Cholesterol-lowering drug could see coronavirus treated like common cold, study finds
[The Telegraph]
Mason Boycott-Owen
,The Telegraph-July 18, 2020
one cholesterol-lowering drug, fenofibrate, showed promising results
I have no way to validate the veracity of the above news clip. However if it is true the results may be known rather quickly. The drug is cheap, readily available and the action was observed in the lab in 5 days. If validated through what could be short clinical trials as a competent therapy, this could be a way out of this nightmare. My thinking from reading the reports is that the probability of this working at least some of the time is very high. The biggest risk is that it somehow results in worse outcomes for some/all population groups.
Even if it fails in clinical trials it may point the way towards other treatments that work.
Any therapy that gets them in and out of the hospital fast and mostly alive is the other great hope. All bets are not on a vaccine as there is too much riding on this. Go medical world,Go, You are keeping this ship afloat.
The “promising results” are in vitro, not even animal studies. The hypothesis seems reasonable, and should be tested further. But drug discovery is immensely complicated, and the vast majority of reasonable hypotheses end up not having therapeutic benefit. It is true that this one can be tested in the clinic fairly readily because fenofibrate is already an approved drug. Perhaps even faster would be a retrospective study to see whether people taking fenofibrate were less susceptible to infection or had better outcomes.
Absolutely correct! There are lots of potential pitfalls. I just hope we see a full court press on this drug to see what comes of the scrutiny.
It pays to be skeptical of the messages from the various positioning indicators mentioned above. The Fed has backstopped credit and Treasuries and as of yet is not buying equities. Thus equities are a second derivative of the credit support, Therefore, it stands to reason that if looking for stretched positioning it might not be found in equities. Indeed, running long credit / short equities / long cash might be a sensible barbell approach to the market.