The Positive Trend in New Covid Infections Continues...

Feb 19, 2021 | Nick Scholte


… although the cyclic nature of human behavior suggests there may be mini-upticks and stalls in the rate of decline as society collectively moves toward a more normal back half of 2021.

To my clients:

It was a mixed week for North American stock markets with the Canadian TSX finishing down 0.4%; the U.S. Dow Jones Index finishing up 0.1%; and the U.S. S&P 500 finishing down 0.7%.

Short update this week…

New covid infections continue to decline precipitously with cases now roughly 80% lower than the early January peak. Why are cases down so much? Many reasons of course, including:

- distancing from the Christmas and New Year holiday periods;

- localized herd-immunities developing in those sub-segments of the population more susceptible to infection. Notably those who dismiss the need for social distancing and mask wearing, as well as those service employees who do not have the option to work from home;

- vaccine roll-outs;

- better and more consistent messaging from the new U.S. President;

- and the cyclic nature of human behavior where the populations begins to collectively act with more caution when circumstances appear troubling, and conversely are prone to relaxing their caution when conditions improve

The last point (i.e. the cyclic nature of human behavior in response to prevailing conditions) suggests that there may be a mini-uptick (or, at least, stall in the decline of infection rates) in the coming days and weeks as the population collectively relaxes its guard in response to the better conditions. However, absent a strong rise in cases owing to new covid variants, and in spite of mini-upticks/stalls owing to cyclic human behavior, I’d suspect the infection rate will continue to generally trend for the better. This is especially so with warmer Spring weather looming.

Economically speaking, for the second week in a row weekly jobless claims both rose and missed expectations. Should this trend sustain, it would be concerning. But it is too early to make that judgement just yet. On a positive note, some of the more important regional manufacturing indices have continued to strengthen and beat expectations. This likely bodes well for the ISM Manufacturing Index to be reported in two weeks.

No further additions have been made to client portfolios since the acquisition of Element Fleet Management two weeks ago. I continue to await a small equity market pullback to add more significantly to client equity weightings.

That’s it for this week. All the best and stay safe,


Nick Scholte, CIM, FCSI

Vice-President & Portfolio Manager

Scholte Wealth Management
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