50 US states started reopening their economies — markets love it (so far)
Summertime, and the living is... Uneasy AF, but not as uneasy as before. As the first day of summer (June 20th) approaches, temperatures are heating up and states are loosening up: two months after lockdown started, all 50 states have begun some form of reopening. The "new normal" is slowly reverting back to a "new but kinda familiar" normal. Americans are:
- Driving more: Requests for driving directions on Apple Maps have returned to January levels (though public transport is still abysmal).
- Traveling more: Passengers per flight quadrupled since April — on Thursday, the TSA reported the highest number of screenings since March (but still 88% way less than last year).
It's not just the travel stats... Investor and consumer optimism is shining through some key indicators:
- Consumer confidence (our relationship status with the economy) got a slight boost in May as some businesses started reopening.
- Weekly mortgage applications are down only 1.5% from last year (a month ago, they were down 35%) despite 40M Americans being unemployed.
- The S&P 500, which measures the stock prices of the 500 largest American companies, is just 11% off its record high.
Optimism should be tempered with caution... Reports of new COVID-19 cases are slowing or levelling off in most states. Twenty states reported an increase last week (could also be a result of more testing). Optimism is also fueled by 118 potential vaccines in the works. But the WHO warned about a "second peak" of the virus — and lifting restrictions makes transmission more likely...and put this month's economic progress at risk.