The data as reported by Johns Hopkins last Friday looked bleak. It showed a huge jump in the daily change in Covid-19 deaths, to 2,425 from the previous day, numbers we've not seen since April. The data seemed plausible at first blush; cases are up, surely the death rate will follow, but the chart still looked odd.
As it turns out, false alarm, it was not a true reflection of what actually happened. The spike in one-day deaths was due to the state of New Jersey adding 1,854 probable Covid-related deaths. Sunday's daily change count of 264 deaths, a post-peak low, seems to confirm that the data reported Friday was an anomaly. The moral of the story is to always question the data, especially in these trying times and with so much riding on every day's statistics.
That's what is moving markets -- increasing cases, states most affected shutting down bars and beaches again -- and driving the fear (in an election year, no less) that we are in second wave territory and setting ourselves up for another economic shutdown. That's why the S&P 500 fell 2.42% on Friday, the second down day of more than 2% last week. That's what will drive markets for now -- whether the country is reopening or whether we will be banished backed to our homes. The latter obviously would be economically devastating and it is not the scenario that markets are currently pricing in.
Meanwhile, there were not a whole lot of names in green on Friday, but one that was really caught my eye. The Gap (GPS) , a member of this year's version of my Tax Loss Selling Recovery Portfolio, rose nearly 19%, and no, it was not due to a better-than-expected earnings release. Gap shares instead were the beneficiary of an expansion of the company's relationship with Kanye West. The struggling retailer signed a 10-year deal with West to sell a clothing line under his Yeezy fashion label. You just can't make this stuff up, folks.
Shares of GPS are still down 32% year to date, but have recovered nicely (up 129%) off the April low ($5.36). We'll see if Kanye can rescue GPS.
Finally, I find it quite remarkable that the S&P 500 is actually in positive territory (up 3%) over this time last year.