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!

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.

I am running this post a day earlier than usual, as we will post the beginning-of-the-month fare tomorrow (e.g., Market Thoughts video). Next week, we will go back to a Thursday update.

One of the big unexamined assumptions of many of the questions I have been getting recently is that politics matters to economics. I get questions from both sides—how bad will it be if candidate X wins? They all assume that candidate X, whoever it is, has the ability to significantly affect the economy and the markets. But is that really the case?

In a client event this week, I got an interesting question: “How do you stay calm? With everything that is going on, with all of the problems and risks that you have to evaluate, every day, how do you manage to stay calm?” I thought it was a very good question.

Over the past week, the news on the medical front has been mixed. The pandemic remains under control, and the case growth rate remains low. But case growth has started to slowly increase again, as post-Labor Day infections begin to register and as schools and universities reopen.