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.

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?

Last week was relatively quiet on the economic update front, with a focus on August’s housing sales and durable goods orders reports. This week will be packed with economic updates, with a focus on consumer and manufacturer confidence and the September jobs report.

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.

Recently, I have been getting a number of questions from people who are scared about what might happen to the financial markets at election time. The fear is that if we get a disputed election, it could lead to disruption and possibly even violence. If so, we could well see markets take a significant hit.