The last two days have not been good for either the US or Sweden.
The US is inching towards an end of the lockdown, with a number of states already lifting restrictions. President Trump is impatient and wants to get Americans back to work. In Sweden, the laissez-faire approach to Covid 19 has drawn particular scrutiny. The data has been poor for both countries.
Daily new cases averaged 37,199 in the last two days for the US (Friday and Saturday). That is higher than the previous daily peak (34,517, April 4th). In Sweden, daily new cases reached a new high of 812 on Friday, before easing back to 610 yesterday.
There are no easy solutions for dealing with Covid 19.
But locking down economies may not be sustainable, simply because citizens may (will) start to flout the government guidelines. There is clear evidence of this happening in the UK, with traffic volumes up over the past week, and mobile phone data showing that people are searching for travel directions more frequently. Large queues have formed outside of 130 B&Q DIY stores after they re-opened.
The stock market is a brutal animal and will not be driven by the death rate so much, but the ability of companies to forge new business models and resume production. Companies such as Amazon do have the deep pockets and technology to provide the requisite safety. This may hurt margins in the short run, but increasingly investors will want to see how management can reopen, while protecting workers. Companies that achieve this delicate balancing act will be rewarded.
Summary
- Daily infections rise in the US
- But equity market is a brutal animal
- Companies will be judged on ability o restart production
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