Today, I'd like to provide an update on the coronavirus, including the economic and market implications. On the medical front, the third wave of the pandemic has accelerated around the country. With new cases at all-time highs and the geographic spread continuing to widen, this is something we need to watch.

Once again, the medical news worsened since the last update, as the third wave of infections has continued to accelerate around the country. Case growth is now at new highs, above the prior peaks in July, while the geographic spread of this wave of outbreaks continues to widen. Case growth in many states is now at levels that threaten the health care systems there, indicating this is a growing problem.

Today, we have another down day in the markets, as the pandemic continues to worsen. So, is it time to worry about the markets again? Let’s take a closer look.

We are in the midst of a rising third wave of the pandemic, as well as facing multiple other issues (the election, the wildfires, and so on). But the economy continues to move forward. Consumer confidence is steady, personal spending is doing well, and business confidence and investment are strong. Even after the initial fiscal and unemployment support, the economy has continued to expand despite rising medical risks. Given all this, maybe it is time to take another look at where the risks are and whether they are as big as has been commonly assumed.

Last week was relatively quiet on the economic update front, with a major focus on the housing market. Home builder sentiment and new home construction continued to show solid growth, supported by low mortgage rates and strong sales. This week will be jam-packed with updates touching on wide swaths of the economy.

We have had a roller-coaster ride in 2020 so far, and the rest of the year looks to be no easier—and probably just as hard. The election is coming up, the third wave of the virus is underway, large parts of the country are on fire, and a record-setting hurricane season is in progress. And that’s just in the U.S. Looking abroad, at least two things—Brexit and the U.S.-China trade war—would be making bigger headlines here in any other year. There is a lot to pay attention to, a lot to worry about, and a lot that could go wrong. With everything in play, we need to remember to do something critical.

The medical news has continued to worsen since the last update, to the point that a third wave of infections is now underway around the country. Case growth has accelerated and is approaching the July peaks, while the geographic spread of this wave of outbreaks continues to widen. Case growth in many states is nearing levels that could threaten the health care systems there, indicating this is a growing problem.

"When the facts change, I change my mind.” This is a famous quote from John Maynard Keynes, which is followed by the sardonic question, “What do you do, sir?” Very wise and, of course, very witty. It’s not, however, necessarily useful.

Last week, I wrote that I was not worried about the deficit and the debt—at least in the short to medium term. We appear to have lots of running room before the debt is an immediate problem, which could be years (or more) away. While acknowledging it as a problem, looking at history and around the world, there are no real reasons it has to be an immediate problem.

Last week was packed with economic updates, with reports largely coming in mixed. Better-than-expected results for retail sales and consumer confidence were offset by rising initial unemployment claims and a disappointing decline in industrial production. This week’s news will largely focus on housing, with updates scheduled on home builder confidence, new home construction, and existing home sales.

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. On the medical front, the pandemic remains under control at the national level, but state-level outbreaks are getting worse. Multiple states have seen case growth accelerate, to the point that some health care systems are at risk. This is something we need to watch.

The pandemic remains under control at the national level, and the case growth rate remains below recent peaks. Still, the medical news continues to get worse, as this past week has seen case growth continue to rise on a seven-day average basis. While some of this rise may be due to increased testing, most looks to be owing to widening outbreaks in many states. In fact, case growth in many states is starting to approach levels that could threaten the health care systems there, indicating this is a growing problem.

A month or so ago, I wrote about how worried I was that no one seemed concerned about the deficit or the debt. People were worried about lots of other things. But for some reason, I wasn’t getting any questions about the deficit or debt—and it worried me.

As of yesterday, the markets spiked again, taking the major indices back close to new highs. The S&P 500 closed at 3,534, less than 2 percent below the all-time high of September 2, just before markets tumbled. The Dow and Nasdaq results were similar. Clearly, the markets think everything is awesome.

Last week was relatively quiet on the economic update front, with reports on service sector confidence, the international trade balance, and initial jobless claims serving as highlights. This week will be busier, with updates focusing on September’s inflation, retail spending, and industrial production.

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, is a key player in preparing the monthly Economic and Market Risk Updates. Thanks for the expertise, Sam!

On the medical front, the news is getting worse. The pandemic remains under control, and the case growth rate remains below recent peaks. But in this past week, case growth has continued to rise on a seven-day average basis. While some of this rise may be due to increased testing, most looks to be owing to a mix of schools and universities reopening and widening outbreaks in many states. In fact, case growth in many states is starting to approach levels that could threaten the health care systems there, indicating this is a growing problem.

September, as expected, was a difficult month, with markets in the U.S. and abroad down pretty much across the board. Despite this correction, which came after two very strong months, markets were left with strong gains for the quarter, both here and abroad. Overall, the quarter was good for investors despite the disappointing September, and the reasons why come from the same place—the pandemic.

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, plays a key role in putting together the Economic and Market Risk Factor Updates. We are now working on updating the format, and you will see some changes this month and in coming months. Thanks for the great work, Sam!

Last week was filled with economic updates touching on broad swaths of the economy as we prepared to kick off the fourth quarter of 2020. Reports were mixed, with better-than-expected consumer confidence and spending data contrasting with a disappointing September jobs report. This will be a quiet week for economic updates, with reports scheduled to cover service sector confidence, the international trade balance, and the weekly initial jobless claims report.

There were two big items of news to hit the headlines this morning. The first—that President Trump has tested positive for the novel coronavirus—generated the most interest and the most fear. It has been credited with knocking down markets. The second—that job growth continues to slow—has generated much less attention but will have much more impact over time. This reaction is a classic example of what makes the headlines versus what really matters. So, let’s take a closer look.

Today I'd like to provide an update on the coronavirus, including the economic and market implications. On the medical front, the news was mixed. Although the pandemic remains under control, the case count continues to rise, as post-Labor Day infections register and as schools and universities reopen. Still, the number of tests has increased, and it now appears to be approaching the needed levels.

September was a tough month for the markets. They began the month with a drop and ended with everything down, but by much less than feared. The economic news was better, with improved data from the labor market and consumer confidence bouncing back. Business confidence and investment were also healthy.