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!