Delta Market Impact
Updated: Aug 9, 2021
The Delta variant makes up 80% of all new cases in the United States, bringing it to 55,000. The increase in cases shouldn’t be surprising as the country has been removing restrictions. Any parent sending their kid to summer camp, can see why the spread is increasing. Many kids are wearing masks; however, most are not wearing them effectively. Fortunately, children are in a very low risk category and should have a full recovery. Per the CDC website, people under the age of 39 have at worst, a mortality rate of .14%. I assume the actual rate is lower as many people in this category are asymptomatic.
The stock market’s rally may be put on hold as the CDC is changing their recommendations on how to deal with the emergence of the delta variance. The CDC is again recommending fully vaccinated and unvaccinated people to wear masks and children are recommended to wear them in school. These recommendations may cause market turmoil as people begin to fear the reopening play. However, the market’s concern about the delta variant may be misplaced and long-term investors may want to stay the course. Per the table below (CDC website), seniors have the highest mortality rate; however, they also have the highest vaccination rate. Therefore, if they do catch covid, it shouldn’t be life threatening. Children under the age of 17 have a mortality rate of .01% which is virtually zero.
ETF of the Week
iShares Core Small Capitalized ETF (IJR)was the best performing ETF last week at 2.04%. IJR invests in companies with a market capitalization of $600 million to $2.4 billion. Small Capitalized Stocks are much more volatile than the bigger cousins S&P 500 ETF (SPY). Companies in SPY must have a market capitalization of at least $8.2 billion.