It’s about achieving America’s economic potential through innovative solutions.
It replaces political calculation with ROI calculation formulating decisions based on achieving a better return on investment.
Working over twenty five years in America’s financial sector for both large and small companies and now as the director of research and strategy for a $10 billion institutional investment fund manager, I have experienced firsthand what drives economic growth, what stimulates job and wage growth. And I’ve seen up close both how the financial sector operates and its role within the economy. My experience also includes advising the Chicago and Washington, D.C. districts of the U.S. Federal Reserve as well as CalPERS, the largest U.S. public pension fund.
FAACT State (FL, AZ, AL, CA, TX) infection rates have nearly tripled since reopening.
If businesses are forced to suspend or severely curtail operations again, that would be devastating fore the economy.
Watch the FAACT state infection rate for clues to the direction of equity markets.
Forget FAANG Stocks, Watch FAACT State Infection Rates for the Direction of Equity Markets
FAACT states (Florida, Arizona, Alabama, California, and Texas)
have seen a near tripling of their weekly infection rate since
reopening. If business in these states are forced to close or even just
significantly restrict operations in the face of rising infections,
dreams of a “v” shaped economic recovery could turn into the nightmare
of an “L” shaped economic outlook.
Since reopening, the FAACT states have seen a near tripling of weekly
infections. Weekly infections increased from 24,616 reported cases for
the period April 24 to May, to more than 72,000 reported cases reported
during the period June 10 to June 17.
Source: USA Facts
This monumental increase means that these five states alone now
account for 45% of new weekly U.S. infections! This is up from 12%
before reopening in these states.
Source: USA Facts
What happens if businesses in these five states are forced to suspend
or significantly curtail operations? It would be devastating for the
U.S. economy.
These five states account for nearly 1/3 of the total U.S. population
Gross domestic product in these states is in the trillions, $6.8 trillion
Source: USA Facts
Which FAACT state has seen the greatest percentage increase since
reopening? Arizona followed by Texas. Arizona went from less than 2,000
weekly infections before reopening to more than 11,000 as of June 17th. Texas saw its weekly infection rate rise from 3,412 before reopening to more than 16,000 as of June 17th.
Source: USA Facts
While FAANG stocks get most of the press, wise investors would
prioritize tracking the rate of weekly infections in the FAACT states
when trying to forecast the economic outlook and likely direction of the
equity markets. Based on the current “hockey stick” increase in weekly
infection rates currently occurring in the FAACT states, the prognosis
for the economy is not good. What remains to be seen is:
Will be businesses in those states be forced to suspend or curtail operations?
Will Wall Street heed the serious warning signs coming from these
key states or will they largely ignore them instead choosing to continue
buying into much loved Wall Street tropes such as, “Don’t fight the
Fed”?
While Wall Street can ignore reality for longer than a rational
personal would expect, reality like death can’t be avoided forever and
trying to run from reality, much like trying to run from death always
ends the same – in disappointment.
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