It’s been a long time since I posted COVID data. Here is the current 7 day averages in EU and US.
Here is the US cases are beginning to rise again after making progress. This could be related to Labor Day weekend activities. The EU is close to square #1 again.
Bottom line is COVID has the ability to cause significant economic disruptions going forward, especially as we move indoors when the weather declines.
One interesting development the last couple weeks is the expanding high-yield (aka junk bonds) spread. Here’s the chart:
You can see the spread never made it down to the pre-COVID low. It’s starting to creep up a bit now.
If this continues, it is probably a big negative for equities. 1) It means people are becoming more risk-adverse and 2) stocks get paid after bonds. If there is a higher chance bonds don’t get paid, then there is a higher chance stocks are worthless.
Something to watch…