Two weeks ago, after several weeks of significant improvement, the medical news started to worsen as case growth and positive test rates ticked back up. Whether this situation might signal the start of another wave of infection growth was an open question. The good news is that the answer looks to be no. Case growth, while slightly above recent lows, has stayed steady despite the continued reopening of the economy and the increasing spread of more contagious variants of COVID-19. While the battle against the pandemic continues, vaccinations are also continuing. They should end up choking the virus off before it gets to a significant fourth wave. The medical risks are still real, but they are lower than they were two weeks ago, and they’re dropping every week.

The first quarter looks to be the turning point, both for the pandemic here in the U.S. and for the economic damage it has caused. While risks still remain, especially in the short term, the significant progress we made in the first two months of the year started coming to fruition in March, signaling that we are through the worst of it.

In March, we saw a strong end to a healthy first quarter for stock markets. Both the Dow and S&P 500 here in the U.S. showed gains, while developed markets abroad showed lower but still positive returns. We also had good news on the economic front. Hiring rebounded, layoffs dropped, and consumer confidence rose to post-pandemic highs.

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. After several weeks of improvement on the medical front, we’re starting to see modest deterioration as the country reopens. Case counts and positive test rates are back to early March levels, while hospitalizations and death rates have stabilized. While the short-term risks are real, we do have a better outlook for the next two to three months. At that point, between vaccinations and existing exposure, we should be at or close to herd immunity.

We have had a lot of good economic news recently, including the significant bounce in consumer confidence reported by the Conference Board. Consumer confidence rose by more than 20 percent last month, to the highest level since September, before the third wave. According to that increase, people are feeling much better about the economy and their place in it.

I wanted to use the title “Leverage, Margin Calls, and Stock Prices, Oh My” here. But I decided to go with the more specific title so readers would actually know what I was taking about. Those are the real themes, though, as the hedge fund/private family office Archegos is simply the latest iteration of an old and sad story.

For the first time in several weeks, the big picture on the medical front has gotten worse. Case growth and positive test rates have ticked back up as the economy has reopened. While the change is relatively small so far, it is a reversal of previous improvements and signals that both reopening and the spread of more contagious variants are outpacing the positive effects of vaccinations. Faster spread has therefore moved from a potential risk to an actual one.

Today's post was cowritten by Chris Stuart, senior investment research analyst.

Spring is here! I have been eagerly awaiting the chance to write this post. Mind you, spring started a couple of days ago, astronomically speaking. And, of course, spring started weeks ago in more southern states. But today the sun is shining, the birds are making a heck of a racket, and my son went off to school in shorts. So, it seems fair to call this the first day of spring, at least for me.

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. The medical situation continues to improve, as the vaccination campaign moves forward. Still, case growth remains above the levels seen between the second and third waves, and positive rates have not improved in weeks. We still have a very real pandemic on our hands.