This week we will mark the anniversary of the official beginning of the COVID pandemic. The S&P 500 peaked on February 19th of last year as an article had been published two days prior that the U.S. government was concerned about the virus. Millions of cases and two successful vaccines later, we're entering what appears to be the final phase of the virus. The 7-day average for Daily Cases has dropped 64% since the peak over 4 weeks ago. Hospitalizations are down 49% over the same time period. And now, Daily Deaths are starting to catch up - down 22% since January 26th. The positivity rate for daily testing is down to 5.8% and nearing the CDC's threshold for 5% for a pandemic to have reached herd immunity. What is interesting is that Johnson & Johnson has filed for FDA emergency use of their vaccine (which has 66% efficacy and only requires 1 shot) and yet, the FDA has decided to wait until it's normally scheduled committee meeting on February 26th to approve the vaccine. Puzzling that the FDA would not be in a hurry to approve a 3rd COVID vaccine as the virus is still deadly for the elderly.
It's not being reported widely enough, but Corporate Earnings are on a very healthy pace. So far, 74% of S&P companies have reported Q4 earnings and 80% have reported above expectations. Nearly 78% have reported revenues above expectations. Every sector of the S&P 500 has reported higher earnings in Q4 over Q3 except for Real Estate, Industrials, & Energy. Oil has marched higher on supply strains and a decrease in production by OPEC members. This could lead to inflation increases as the year progresses, which is part of our 2021 outlook. Interest rates have also inched higher over the last 4 weeks, also part of our 2021 outlook, causing the BC Aggregate Bond Index to fall into negative territory for the year.
The mobility data tracked by Apple suggests people are driving and moving about close to levels last seen prior to the pandemic. Speaking from experience, on family holiday, it would appear that hotels are at maximum allowed capacity, restaurants at maximum allowed capacity, and highways busy with traffic. It will be interesting to see what the hotel & TSA numbers look like from this past President's Day weekend.
Click on the attached file below to access our full Weekly Market Recap.
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