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Topical Research – Coronavirus Report

- December 1, 2021

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COVID-19 TRENDS
ECONOMIC TRENDS
MARKET TRENDS
APPENDIX

RECOVERY TRACKING

Enormous cross-currents, winners and losers as parts of the economy have roared back, others slower to respond; Omicron currently an unknown

GLOBAL STRINGENCY INDEX

While we still know little about the Omicron variant, we know that the reaction function and policy response to the pandemic remains significant and unpredictable

CASES, HOSPITALIZATIONS, & DEATHS

COVID-19 delta variant wave spread faster but was less severe than winter 2020 wave; Omicron variant may follow same pattern based on early data

NEW CASES

Trends in daily new cases are mixed but with most countries below 2021 peak; notwithstanding Omicron, endemicity may be within sight

DAILY CASES HEAT MAP

Global daily new cases have been trending upwards since late October, but cases are a narrow measure with limited usefulness

DAILY DEATHS HEAT MAP

Mortality data, while imperfect, is unfortunately also trending higher

U.S. POSITIVE TEST RATES

U.S. positive test rate at 9.8%; less testing being done but fewer tests per case suggests the virus is still prevalent

GLOBAL POSITIVE TEST RATES

U.S., Canada positivity rate has seemingly peaked, many countries continue to see promising declines in positive test rates

VACCINATIONS

Vaccination rates continue to rise globally, albeit at a slowing rate, with 3.3 billion people fully vaccinated globally

59% of the U.S. population is fully vaccinated

Vaccines have helped break the link between excess deaths and new cases

MORTALITY RATES

Mortality rates much higher for elderly and pre-existing conditions; mortality rates for healthy kids, teenagers roughly in line with seasonal flu

CFR & Ru0

Measured in terms of total mortality, Covid has been more than 4x worse than bad flu season

EXCESS MORTALITY

Stripping out challenges and inconsistencies in reporting of Covid-specific data, excess mortality numbers appear to be trending lower

In the U.S. and globally restaurant activity fully recovered to pre-pandemic levels; activity in UK, Germany declining as Covid cases rise

Retail, recreation and workplace visits in the U.S. fell sharply after the announcement of the Omicron variant

MANUFACTURING PMI

Manufacturing in developed markets improved at a slower pace in October, emerging markets are expanding at a greater pace

Select manufacturing & services PMIs point to global expansion with the exception of China manufacturing

Dry bulk shipping rates have pulled back sharply from October peak

MARKET TRENDS

ASSET CLASS PERFORMANCE

U.S. large cap stocks have outperformed most asset classes through the crisis, U.S. small cap flat since February, WTI Crude down 23% from peak

CREDIT SPREADS

Credit spreads have recently widened from July lows

KEY DATE MARKET RETURNS

Crypto, midstream energy and micro cap stocks have outperformed since the vaccine rollout began, safe-havens have lagged

EPIDEMIC/PANDEMIC CASE STUDIES

The COVID-19 pandemic’s booming asset prices was at odds with past epidemics

U.S. EQUITY SENTIMENT

U.S. equity sentiment fell sharply after news of Omicron variant (exacerbated by Powell’s comments), S&P 500 had its worst week since September

WTI CRUDE OIL & VIX

The VIX jumped to its highest level since January and WTI Crude Oil entered a bear market after news of the Omicron variant broke

QUARANTINE BASKET TRADE

Quarantine stock basket continues to trail the broader U.S. stock market, will Omicron put some of these trades back on?

APPENDIX

SECTOR & INDUSTRY PERFORMANCE

DISCLAIMER

Magnus Financial Group LLC (“Magnus”) did not produce and bears no responsibility for any part of this report whatsoever, including but not limited to any microeconomic views, inaccuracies or any errors or omissions. Research and data used in the presentation have come from third-party sources that Magnus has not independently verified presentation and the opinions expressed are not by Magnus or its employees and are current only as of the time made and are subject to change without notice.

This report may include estimates, projections or other forward-looking statements, however, due to numerous factors, actual events may differ substantially from those presented. The graphs and tables making up this report have been based on unaudited, third-party data and performance information provided to us by one or more commercial databases. Except for the historical information contained in this report, certain matters are forward looking statements or projections that are dependent upon risks and uncertainties, including but not limited to factors and considerations such as general market volatility, global economic risk, geopolitical risk, currency risk and other country-specific factors, fiscal and monetary policy, the level of interest rates, security-specific risks, and historical market segment or sector performance relationships as they relate to the business and economic cycle.

Additionally, please be aware that past performance is not a guide to the future performance of any manager or strategy, and that the performance results and historical information provided displayed herein may have been adversely or favorably impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be inferred that these results are indicative of the future performance of any strategy, index, fund, manager or group of managers. Index benchmarks contained in this report are provided so that performance can be compared with the performance of well-known and widely recognized indices. Index results assume the re-investment of all dividends and interest and do not reflect any management fees, transaction costs or expenses.

The information provided is not intended to be, and should not be construed as, investment, legal or tax advice nor should such information contained herein be construed as a recommendation or advice to purchase or sell any security, investment, or portfolio allocation. An investor should consult with their financial advisor to determine the appropriate investment strategies and investment vehicles. Investment decisions should be made based on the investor’s specific financial needs and objectives, goals, time horizon and risk tolerance. This presentation makes no implied or express recommendations concerning the way any client’s accounts should or would be handled, as appropriate investment decisions depend upon the client’s specific investment objectives.

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TERMS OF USE

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DEFINITIONS

Asset class performance was measured using the following benchmarks: U.S. Large Cap Stocks: S&P 500 TR Index; U.S. Small & Micro Cap: Russell 2000 TR Index; Intl Dev Large Cap Stocks: MSCI EAFE GR Index; Emerging & Frontier Market Stocks: MSCI Emerging Markets GR Index; U.S. Intermediate-Term Muni Bonds: Bloomberg Barclays 1-10 (1-12 Yr) Muni Bond TR Index; U.S. Intermediate-Term Bonds: Bloomberg Barclays U.S. Aggregate Bond TR Index; U.S. High Yield Bonds: Bloomberg Barclays U.S. Corporate High Yield TR Index; U.S. Bank Loans: S&P/LSTA U.S. Leveraged Loan Index; Intl Developed Bonds: Bloomberg Barclays Global Aggregate ex-U.S. Index; Emerging & Frontier Market Bonds: JPMorgan EMBI Global Diversified TR Index; U.S. REITs: MSCI U.S. REIT GR Index, Ex U.S. Real Estate Securities: S&P Global Ex-U.S. Property TR Index; Commodity Futures: Bloomberg Commodity TR Index; Midstream Energy: Alerian MLP TR Index; Gold: LBMA Gold Price, U.S. 60/40: 60% S&P 500 TR Index; 40% Bloomberg Barclays U.S. Aggregate Bond TR Index; Global 60/40: 60% MSCI ACWI GR Index; 40% Bloomberg Barclays Global Aggregate Bond TR Index.