Risk Assets Rebound Despite 30 States Reporting an Acceleration in New COVID Infections

 

Risk assets bounce back as shortened trading week begins. US equity indices are bouncing back modestly this morning after falling to recent lows on Friday. The jobs report on Thursday will be this week’s major market moving event with COVID-19 infection rates remaining in focus as well. The 10-year Treasury yield is unchanged from Friday’s level at 0.64%, the lowest level since mid-May. The VIX or “Fear Index” continues to be elevated- climbing to 36 this morning.

 

 

Virus cases continue to accelerate in Texas, California and Florida. In more than 30 US states, virus infections continue to spread at a rapid rate, with Texas, California, and Florida at the top of the list. The weekly average of new domestic cases has risen by 41% with over 40,000 infections reported over the weekend, pushing government officials from Florida and Texas to halt reopening plans. US COVID-19 cases have passed 2.5 million confirmed infections with over 128,000 fatalities.

 

 

Quarterly bank reports may become a thing of the past.  Currently, the 3,200 community banks that are regulated by the FDIC file extensive reports on a quarterly basis resulting in a data dump.  In an attempt to receive the data in a more organized fashion, the FDIC is launching a competition among 20 firms to create a more timely reporting method to better assess banks’ credit exposures and deposit information.  FDIC Chairman Jelena McWilliams added, “What we would like to do is frankly make the call reports obsolete, and not because we wouldn’t have the data but because we would have better data and we would have more timely data.”  The modernized system will allow the data to be better received, theoretically resulting in increased consumer protection and limited financial crime.