Reopening Related to Surges?

June 30, 2020
Reopening
The soon-to-be-released June jobs report will offer insight about the state of the economy.

 

Most economies have reopened to some degree. And several states have seen a surge in infections at the same time. From this, we can conclude one thing -- the virus is not taking the summer off as some had speculated might happen. On the other hand, can we say that the reopenings are causing the spikes? Certainly, increased activity should cause an increase in infections. On the other hand, not every state which is opening is seeing the same spike.

The markets are watching this relationship very closely. We mentioned previously that the stock market comeback was extremely dramatic. But we have seen some precipitous drops as well. News of surging cases has made the markets nervous, just as news of possible drugs or vaccines have sent the markets into a frenzy. Thus, the markets are reacting to medical news as much as economic news these days.

While medical news is not scheduled, economic news does follow the calendar. At the end of this week we will see the jobs data for June. It will be a very interesting report as May's numbers were better than expected, but there was much speculation that the avalanche of unemployment claims was overwhelming tracking systems. Originally, we thought the first sign of rebound would be this report, but since we saw this rebound in May, we are not quite sure what we will see in June. Stay tuned for what could be a wild ride.