Vaccination hesitancy is contributing to a surge in new COVID infections

As I walked into Safeway early on Saturday morning, some older white man said to me, “Take off your mask.” I was a bit taken aback and responded by suggesting he mind his own business. The reality is that we are all still very much in a global pandemic. I wear a mask in public, because leading health authorities in this country are advising that we do so. I’m fully vaccinated. But many others aren’t and I don’t wish to become “breakthrough” case, however mild it might be.

As we know, the pandemic has divided this nation. People differ on wearing a mask, getting vaccinated and gathering in large groups. Science tells us how to combat this virus. Yet, there are many who don’t believe the science, believe they won’t get infected, believe their god will protect them, believe they have a right to avoid prescribed public health measures, believe the vaccines are unsafe, unproven, etc.

The most advanced nation in the world has lost over 610,000 lives to COVID-19 and we are perilously close to yet another resurgence of the virus caused by the Delta variant. The most effective way to combat the virus is through vaccinations. But tens of millions of Americans are unwilling to get the shot.

Nonetheless, the economy is rumbling down the tracks with growing momentum. Businesses have recovered. Corporations are posting record earnings. Approximately one quarter of the companies in the S&P 500 index have reported second quarter earnings and nearly 90% have exceeded Wall Street’s expectations. Companies in the index are on track to post roughly 74% growth in earnings in the quarter compared to the same quarter in 2020, according to FactSet. It seems the only thing slowing our economy is a shortage of workers, supply constraints … and Delta.

The Markets

After dropping significantly on Monday, the stock market bounced back big this week. On Friday, the Dow Jones Industrial Average rose by 238 points, or 0.7%. The Dow closed Friday over 35,000 for the first time. The S&P 500 index increased 44 points, or 1.0%. The Nasdaq gained 152 points, or 1.0%. For the week, the Dow rose 1.1%, the S&P 500 index increased 2% and the Nasdaq gained 2.8%. All three indices set new records.

West Texas Intermediate Crude futures for August 2021 delivery traded at $72.17 a barrel on Friday. Oil was up 0.7% for the week and is up 50% year to date. Even with the OPEC+ deal to increase production, strong demand is pushing prices higher.

CNBC WTI 2021 07 25

Source: CNBC

10-Year Treasury Note

Last Monday, the yield on the 10-year Treasury note fell as low as 1.181%. By Friday it had risen to 1.286%.

As we’ve discussed, the 10-year tells us a lot about how investors feel. Rising yields (which occur when prices fall) indicate investors are shifting to a “risk on” approach to the market. When investors sell bonds, their prices drop and their yields rise.

MW 10 Yr Treas 2021 07 25

Source: MarketWatch

COVID-19 – The Numbers

Globally, across 213 countries and territories, there have been over 193 million confirmed cases and over 4.1 million deaths. In the United States, over 34 million have been infected and over 610,000 have died.


Infections are increasing in every state. The seven-day rolling average for daily new cases was running at 37,000 last week, according to Johns Hopkins University.

The CDC reports that 83% of new infections are caused by the Delta variant, which is estimated to be 40%-80% more infectious than the Alpha strain.

CDC Cases 2021 07 25

Source: CDC


Hospital admissions have climbed 39% over the past week. As more people are getting sick from COVID-19, hospitalizations are increasing. According to the CDC, the current 7-day average is 3,0167.

The CDC reports that 947% of those entering the hospital for COVID-19 are unvaccinated.

CDC Hospitalizations 2021 07 25

Source: CDC


Deaths continued to rise last week. Nearly all the people who have died in recent week were unvaccinated.

CDC Deaths 2021 07 25

Source: CDC


Less than half of the total population of the US is fully vaccinated. This is highly problematic, because public health experts tell us that we need approximately 70% of the population to be vaccinated to end the pandemic.

Recent surveys indicate that most Americans who aren’t vaccinated against the virus don’t intend to get the shots. If this holds, we can expect more infections, hospitalizations and deaths.

The chart below shows the daily rate of vaccination in the US.

CDC Daily Vaccinations 2021 07 25

This chart shows the cumulative number of people fully vaccinated in the US. There are 328 million people living in the US (as of 2019).

We can see from the chart below that just under 163 million have been vaccinated. There are still tens of millions of unvaccinated Americans.

CDC Vaccination Trend 2021 07 25

Source: CDC

For an interactive map of the rate of vaccinations in the US:

COVID ActNow 2021 07 25

The Labor Market

The Labor Department reported that weekly unemployment claims rose to 419,000 in the week ending July 17. This extends the bumpy ride in the labor market.

Businesses are hiring to meet increased demand for their products and services. Companies have posted the highest number of job openings in two decades. Hiring is increasing. But, as we have described over the past several months, a disconnect persists between the businesses looking for worker and workers looking for employment. Economists expect that, over time, there will be a better match between opens jobs and workers who are qualified for the positions and motivated to take them.

The number of people receiving unemployment benefits fell to 12.6 million in the week ending July 3. In the last week of May, there were 13.8 million receiving such assistance.

TE Jobless Claims 2021 07 18

Source: Trading Economics

Infrastructure Deal

The $1 trillion infrastructure package for roads, broadband and other public works projects is still stuck in Congressional negotiations. Senate Republicans forced the removal of a provision that would have strengthened IRS enforcement and, presumably, helped generate revenue to fund the massive package.

Democratic Majority Leader Chuck Schumer scheduled a procedural vote for the legislation last week. But Republicans filibustered and forced a delay indicating that a bipartisan group of senators needed more time to negotiate the deal.

Negotiations continue.

Parting Thought

We expect the markets to ride up and down as investors absorb information. In any given week, if the preponderance of news is positive, the markets will advance. If not, they will decline.

The Delta variant and vaccination efforts are now the focus. Those who are unvaccinated control, to a great extent, what will happen in the future.

We wish you a safe, smoke-free summer.

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