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Declaring Victory as Cases Continue to Rise

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Insights and Market Perspectives

Declaring Victory as Cases Continue to Rise

Author: Greg Valliere

May 6, 2020

WE USUALLY SEE THE GLASS AS HALF FULL, but declaring victory — disbanding the conovavirus task force within weeks — strikes us as bizarre, because new infections and fatalities continue to rise. At best, this pandemic is half over.

ELIMINATE DATA FROM NEW YORK, and the rise of new infections is striking — especially in rural America, where enormous clusters persist near prisons and meat packing companies. Nationwide, 100,000 deaths are virtually certain by July, with new cases persisting well into winter.

SO WHAT GIVES? Why the optimism among policymakers and the markets?

It can’t be based on polls: Nearly two-thirds of Americans worry they will get the disease, and overwhelming majorities say they’re not willing to go to restaurants, movie theaters, stores, etc.

It can’t be based on the near-term economy: Friday’s jobs report could approach 20% unemployment, and this quarter’s grim GDP could be followed by a halting recovery, not a V-shaped bounce-back.

It can’t be Congress: Lawmakers showed further signs yesterday of heading into a long gridlock over provisions in the next aid package. There’s virtually no support among Republicans for President Trump’s demand to cut the payroll tax.

It can’t be social distancing: Streets and parks and beaches were packed this past weekend, and some stores defied governors and re-opened. Perhaps 25% of people (including the president) refuse to wear masks.

SO WHY IS THERE SUCH OPTIMISM, especially in the markets? Our take is threefold:

First, there’s significant progress toward developing readily available vaccines.
Scientists at Pfizer apparently have a drug that could become available this fall, fabulous news if accurate. Other labs, from Oxford to Gilead, are making astonishing progress.

Second, markets look ahead, and what many investors see by late this year is an economy clearly on the mend, with enormous monetary and fiscal stimulus still in place. Trump is correct — the economy should be surging a year from now.

Third, this is a traditionally optimistic country, filled with a can-do attitude and a fierce independence that rejects being controlled by authority. We get that, and it’s great to see America re-opening.

BUT WHEN WE HEAR THE PRESIDENT virtually declare victory while abolishing the task force, we have to state the obvious — the virus has not been defeated, not even close.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2021 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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