May 6, 2020

Covid-19 : Tracking the Recovery – May 6, 2020

Recent economic data releases have been clearly weighed down by the impact of shelter-in-place orders and business closures across the country. We have begun to closely monitor plans to loosen such restrictions and allow businesses to reopen at a state-by-state level, which may provide insight into the magnitude and duration of the economic bounce back we anticipate.

The White House has issued guidelines for states to consider when making decisions on reopening businesses and lifting stay at home restrictions. Key elements of the plan involve a decline in the number of documented new Covid-19 cases for a period of 14 days, robust testing for at-risk healthcare workers, efficient patient testing and contact tracing. Hospital ICU capacity and the ability to protect the general public are other important factors. The plan offers guidelines for individuals and employers for phasing in activities gradually while monitoring for signs of a resurgence of the disease. To date, 41 states have communicated some type of plan to reopen to varying degrees of activity with most beginning an initial phase. With individual Governors making decisions for their respective states, the timing and approach to restarting economic activity varies considerably.

Some states are moving forward at a faster pace than others. Georgia, for example, allowed many service-oriented companies to reopen last week including gyms, salons, restaurants and movie theaters, with capacity restrictions and social distancing protocols. Florida reopened certain beaches and has begun allowing patrons to reenter restaurant and retails shops in less populated counties this week, at reduced capacity. West Virginia has gone a step further to allow church services and dentists to resume services. Alabama is allowing all employers, retailers and beaches to reopen under proper sanitation and social distancing rules and Texas is not far behind with
numerous openings this week and a more wide-spread plan slated for May 18.

Some Governors, however, have decided to extend restrictive stay at home orders. In the New England region, this includes (for now) Rhode Island to May 9 for partial openings of offices and retailers, New Hampshire May 11 for certain businesses to May 15 for restaurants offering outdoor dining, Vermont May 15, Massachusetts May 18, Connecticut May 20 and Maine with some restrictions loosened in May with more scheduled for May 31. On the more restrictive end of the spectrum, Virginia has extended sheltering orders to June 10 and New Jersey has no set date to lift restrictions. In New York, Governor Cuomo has ordered non-essential businesses to remain closed until May 15, although seems likely to extend restrictions, particularly within the heavily infected city areas. Given the concentration of cases within his state, he has been one of the more vocal Governors, articulating clear metrics for taking the state’s economy off “pause” relating to hospitalization capacity and slowing of the outbreak.

Monitoring changes in infection rates after restrictions are lifted will be a critical step in determining whether reopening may proceed in the tiered phases described or will need to be dialed back. The availability of testing continues to be key to obtaining this type of valuable data. Some areas continue to be hindered by a lack of available testing while others like Los Angeles recently came out as the first city to announce a program of free testing for all residents. Health experts agree that a ramp up in testing is a crucial component for states to consider lifting social distancing requirements.

As we move through this process, we will continue to monitor activities and share information we are reviewing as we consider the path forward with respect to economic activity. As always, we encourage any to reach out with any questions. Our Investment Officers and Wealth Management Officers remain fully available tofield any questions you may have. While we all look forward to the day when we can comfortably hold meetings in person, we will continue to ensure that you have full access to all of the Plimoth Team. In fact, we are currently making plans for when we eventually loosen restrictions, which will include new safety protocols to do our part in keeping everyone safe.

Be safe and be well!