Let us consider the great catalyst for 2020: the impact of the coronavirus. After a relatively sedate third quarter, the cases in much of the country – particularly the Midwest and Great Plains states – are sharply higher as colder weather, and increased interactions create opportunities for the virus to spread. The IMHE estimates (https://covid19.healthdata.org/united-states-of-america) suggest a harsh 4th quarter. Experts expect this next wave of COVID to be the sharpest in terms of case numbers because most of the population is still susceptible and cold-weather behavior invariably creates elevated numbers. They suggest the next 6 to 12 weeks are going to the roughest time of the epidemic.
Yet, despite the frightening negativity, there are reasons to suspect that the 4th quarter might represent the peak for the pandemic. The coronavirus will probably never “just go away” fully, but the 4th quarter – although bad – still might represent the end of the worst of it. First, millions of Americans will have had the disease and largely recovered coming into 2021. We’ve officially counted 8 million Americans with COVID, but the real number is assuredly several times higher. Second, the markets have noted potential therapeutics with hopeful potential – like Regeneron’s monoclonal antibody treatment. Third, perhaps most importantly, Pfizer has been not-so-subtly indicating a phased rollout of vaccines (pending emergency approval) starting as soon as late-November.
For forward looking investors, the lure of hope is strong. Many of them think they see a light at the end of the tunnel. Only time will tell if they’re right.