Preliminary data first, so you have data to stand on when we get to the weather-related angle:
Although we could see a “snap-back rally” this week in markets, the longer-term outlook seems to be firming up: We would not be surprised to see stocks collapse to below 2,000 on the S&P and that infers a Dow that could drop to the 17,000 area – or lower.
We laid out the wave structure on our Peoplenomics website Saturday. But, an early look at the futures and headlines suggests another “Pepto-loading dose” before looking at your 401-K.
Gold, which had a big run up earlier had already completed a pullback last week and is heading up again this morning. Early on it was up $30-bucks (depending on quote source) but it has pulled back only up around $20-bucks as I write.
Astounding to us is that Silver is languishing under $17-bucks an ounce, especially when there’s anti-bacterial and anti-viral activity of silver up the wazoo. Admittedly, that’s a 2011 paper, but here’s one from 2014 and another from 2019. I would have thought, given the long history in the literature, that facing global pandemic silver would outshine gold. But, there’s the papers and there’s the quotes today. We make no claims as to the intelligence level of humans. If we did, that’d make us stupid, too!
Rolling the Data
Back in early January, we cobbled up a 5-day rolling change indicator to gain insight into the rate of COVID spread, but it turned out to be surprisingly useful for seeing impact of reporting changes as China revamped its methodology.
Here are the latest (as of press time) numbers compared. Do notice that the Chinese methodology change early-on had virtually no impact on the long-term results. The cat was already out of the bag:
As you can see, by the most recent couple of weeks, we look to be stabilizing in that 2% range every 5-days.
Not many sites will make forward predictions – and we prefer the term “psychological impact guidance” so you’re mentally ready to cope with “the news when it gets here” – we have been running the numbers forward as fresh data becomes available.
It’s not pretty, but as one of the most useless phrases in the American idiom holds “It is what it is…”
What little happy-talk there is today suggests that the US Federal Reserve is willing to lower interest rates at their upcoming meeting (March 19-20). Personally, I rather expect they will move sooner than later. My reasoning is that a sudden rate reduction (like this week) would have more impact than a reduction that is already baked-in-the-cake by incessant headlines and rewrites of the coming event.
Sidebar: If I were running the Fed models, that’s how I’d play it. Admitting, however, that there is longer-term risk. In that the Fed will not have lower rates as a response when we get to (my expected much lower) market levels. Maybe COVID will rid us of central bankers and we can return to Congress managing money?
But with the clown posse there on The Hill, it becomes a vexing choice: Who would you trust more to hold your wallet? Schifty Schiff and Nancy, or some self-interested Banksters? At least with the latter, we know the agenda and it’s a better gamble than slow-motion socialism. OK, I’ll stay off that soap box for now. But a terrible choice for once free people to make.
A Weather Problem In Focus
The main thing I wanted to pass pass by you was how the data is spreading on the geographical tracking maps, such as the Johns Hopkins GIS page.
The “conventional wisdom” is that COVUD MAY slow down as the weather warms up. One doc I spoke to over the weekend (who came up with the notion that when 100-deaths deaths occur nationally, your exposure risk at about 1-in-663) is worried because he’s in Washington State. His “Rule of 100” as a kind of last ditch bug-out window for viable relocation is closing in as two deaths have now occurred in the Seattle area.
Another medical type (PhD level) in Washington, has been clinging to the idea that warm weather would quickly slow-down the spread of the virus.
With these two competing views (Yikes and Chill, let’s call them) we can divide the country along a sloping East-West axis and notice something odd:
In Seattle, the high today will be 50F and that’s where two people have died. In fairness to the Jet City, the outbreak centering on nursing home means the population of that cluster is already over in the very “at-risk” column. A third person is in critical at Evergreen hospital in Kirkland, so the numbers could go higher.
As you can see, the clusters don’t seem particularly weather-related. In Toronto, for example, the high today will be 41F (and whatever that is in C – 5C?). While in Los Angeles, the high will be 72. In Tampa, the high will be 77. See the problem?
This quietly hints that if cases can be moderated by weather, we would reasonably expect to see them moderating south of the roughed-in white line. So far, however, they don’t seem to be. Time will tell.
Unfortunately, we don’t have a staff epidemiologist on hand here, so we tried to think deeply whilst sipping a good 14-year old single-malt Sunday afternoon out here in the double-wide. (Oban, thanks for asking!) It occurred to us that weather may give us a “second season” this summer even if it turns out weather moderates spread.
“Seems to me, in the spring, people will be outdoors more. But then, when we get into the really hot and humid part of the summer – about June, or so – then everyone will run inside and turn on the AC,” observed (spousal-unit) Elaine. Her point’s well-taken. Air conditioning colds and all that.
Bottom line to pay attention to? Outcomes will bear watching in the next 6-months as we roll up and into summer. Comparative death rates do matter and it should become evident in the data over time.
The Financial Week Ahead
We’re due to a Purchasing Manager report 15-minutes into the market action today. Depending on how that looks, things could get better, or worse. D’uh. (I could write for the MSM with pap like that…)
It’s a hard one to call: One case is that with China going offline, there are likely to be big increases for anyone domestically who can make a tangible. On the downside, can they get parts? Is there even a screw machine left in America anymore? You know — the reason for my Sunday whine about the death of Industrial Arts in America…
Tuesday would be a fine day to “call in well.” The only data point is the Redbook and pass the NoDoz on that, please.
Life returns Wednesday as we start ramping up toward Friday’s Employment Situation report from the Labor Department. Wednesday, ADP will report Job Growth while Thursday, the Challenger Job Cuts are due.
Productivity and Costs will be issued Thursday by Labor and then Friday International Trade data will come in. That will give us perhaps some of the initial impacts of COVID. Or, ask a longshoreman at the Port of L.A. or Long Beach.
Ugly History Rhyme?
The biggest human rights story today is that China has gone to forced labor to keep making name-brand products for the West.
According to the Australian Strategic Policy Institute (ASPI):
“The Chinese government has facilitated the mass transfer of Uyghur and other ethnic minority1 citizens from the far west region of Xinjiang to factories across the country. Under conditions that strongly suggest forced labour, Uyghurs are working in factories that are in the supply chains of at least 83 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen.
This report estimates that more than 80,000 Uyghurs were transferred out of Xinjiang to work in factories across China between 2017 and 2019, and some of them were sent directly from detention camps…”
There’s a lot more to read over here, so put it on your deep-reading list.
Why is it, in certain caffeine-laced moments, I get a vision of China re-enacting in a pre-WW II German sort of role? Swapping stars for crescents, along the way.
Which would mean all those new Chinese bridges and rail systems could rhyme with the German Autobahn. You do remember how those came into being in the early 1930’s, right? Wiki it and you’ll find:
“The idea for the construction of the autobahn was first conceived in the mid-1920s during the days of the Weimar Republic, but the construction was slow, and most projected sections did not progress much beyond the planning stage due to economic problems and a lack of political support. One project was the private initiative HaFraBa which planned a “car-only road” crossing Germany from Hamburg in the north via central Frankfurt am Main to Basel in Switzerland. Parts of the HaFraBa were completed in the late 1930s and early 1940s, but construction eventually was halted by World War II. The first public road of this kind was completed in 1932 between Cologne and Bonn and opened by Konrad Adenauer (Lord Mayor of Cologne and future Chancellor of West Germany) on 6 August 1932.“
And look at how China has turned its high speed rail system into a “limited access” transport system using social credits…My, doesn’t history repeat with harmonies and subtexts? Just notice the riff is not roads versus trains. It’s about LIMITED ACCESS which is why Internet Licensing will be along, in due course, too. Forced group-think is here. Watch the democrats convention foreplay for pointers.
The sanitized version is in Masks may actually increase your risk, surgeon general warns. But, what was said boiled down to this: The government doesn’t want YOU to buy N-95 masks so healthcare workers can have and use them.
If the “sturgeon general” doesn’t think they work, why in Gods name would he want them for health workers, not regular people? See how this doesn’t get followed-up on in the LameStream Media? FMTT…‘re-freakin-diculous.’
OK, so much for real. Dow futures are down a hundred. But let’s more into the deep piles of “bull sheep” that keep your would-be competitors asleep while you’ve been prepping since early January, right?
Where to begin? Lemme see…what’s really useless.
Send in the Clowns! Buttigieg, Steyer drop out of Democratic race as Biden looks to close in on Sanders.
Cross-selling Correctness! Funding for female founders increased in 2019—but only to 2.7%.
Scream Climate, too: BlackRock faces critics on Amazon deforestation.
Circuses Basketball then! LeBron James believes NBA is ‘in great hands’ following rematch with Zion Williamson.
Either you and me are getting a hell of a lot smarter, or the world is in intellectual freefall.
Wow. Now for chow…
Write when you get rich,