How to Read the Dashboard

Our crisis dashboard includes signals from three areas: 1) public health, 2) the consumer sector and 3) financial markets. By pulling big data from traditional sources (earnings growth and gross domestic product, for example) and nontraditional sources (like Google Trends and Glassdoor), we can create a better mosaic of the road back. Public health, of course, is the key: until there’s a vaccine, the cascading impact of the virus may continue.

The dashboard color codes (red, yellow or green) indicate the current state of each signal, while the arrows indicate the trend (improving, deteriorating or unchanged).

What’s Changed Since Our September Update?

As many countries have moved forward with reopening their school systems and economies, coronavirus cases have continued to rise—with the danger highlighted by the news that US President Donald Trump and his wife had contracted COVID-19. The choice between reopening and rising virus cases presents difficult choices. We’ve changed school status and travel/leisure, which had been improving, to stable.

The same is true with financial conditions, as high-yield spreads have increased lately, though this indicator remains in the green. Commodity prices have also been downgraded to stable, as oil prices, which tend to move in the direction of economic activity, have fallen. Home buying and refinancing, which remains in the green, has been supported by very strong housing market activity.

Public Health

  • Globally, the number of confirmed coronavirus cases continues to rise—it’s currently about 34 million, and deaths recently exceeded one million. We’ll be monitoring case counts as we enter flu season, which could complicate the assessment of symptoms.
  • The R0, which tracks the average number of cases spread by one person, is slightly above 1.0 globally, up from its recent lows. However, previous hotspots like Brazil and India have fallen below 1.0.
  • Hospitalizations have stabilized, though there’s risk of an increase as case counts rise.
  • In areas like New York, companies have begun a measured return to the office.


School Status:

  • US school districts have largely resumed classes, some using real-time virtual learning. Areas like New York City remain virtual, but could return to in-person classes over the coming weeks.
  • Higher education’s first semester has seen mixed results, with outbreaks prompting some schools to quarantine students or send them home. According to a New York Times survey of over 1,600 US colleges and universities, over 130,000 COVID-19 cases have been reported since the pandemic started.

Travel and Leisure:

  • Airline flights originating in the US have rebounded from their lows and stabilized at about 47% lower year-over-year. China flights have improved considerably, down just 3% year-over-year. Europe flights have declined modestly following an improved summer, with countries like the UK and Germany down about 64% year-over-year.
  • In the US, “OpenTable” bookings have improved considerably, down 39% from last year’s levels. Globally, bookings have also rebounded strongly, now down 31% year over year. Countries like Germany have seen an increase in bookings versus last year’s levels, up 5%.
  • Demand for vacation rentals has returned to normal, with Airbnb interest in line with last year; VRBO searches are up about 22% year over year.
  • Based on Google and Waze Mobility Data on actual miles driven, mobility has largely stabilized but is down from its peaks, as the summer driving season ends and people return to work.
  • Subway traffic in China is down about 8% relative to last year, an improved level indicating that people have started returning to public transit.

Home Buying/Refinancing:

  • US housing activity remains very strong: existing home sales have risen 10.5% year over year as of August 31, a mirror image of activity being down 11.7% year over year in June. The number of people searching for home loans is up 9% year over year.
  • Building permits across the US remain robust, having risen approximately 15% from last year’s levels.

Employment & Household Finances:

  • US jobless claims have slowed, though 63 million people have filed for unemployment benefits since mid-March. The US unemployment rate declined to 7.9% with September’s jobs numbers. Euro area unemployment remains around 8.1%.
  • Corporations are reevaluating staffing needs to cope with lower demand and continued operating restrictions in response to COVID-19.
  • Credit card spending data is up 2% versus 2019 levels, but the bottom quarter of spenders are outlaying 10% less than last year due to the lack of added fiscal stimulus measures.
  • Congress has agreed to return to the negotiating table to discuss a stimulus package to support households. However, policymakers remain divided along party lines on the size.

Financial Markets

Investment Flows:

  • Based on Simfund data, about $42 billion has moved into bond funds since the beginning of September. Equities have seen outflows of about $6 billion over the same period, though tech funds have experienced $48 billion in net inflows year to date through August 31, reflecting investors’ excitement about long-term secular trends.
  • According to The Investment Company Institute, money-market fund assets have declined to $4.4 trillion, down from a peak of $4.8 trillion in mid-May. This suggests that investors have shifted into slightly riskier but higher-paying fixed-income investments.

Financial Conditions (Policies, Spreads and Curves):

  • High-yield spreads have risen in recent weeks to approximately 517 basis points, as measured by the average option-adjusted yield spread of the Bloomberg Barclays US Corporate High Yield Index.
  • The 10-year US Treasury has stabilized around 0.68%.
  • As we enter US election season, we’re seeing an uptick in potential M&A activity and IPOs as companies look to fast track activity ahead of potentially higher US corporate tax rates.

Commodity Prices:

  • Oil prices have declined to the high $30s to low $40s per barrel, with West Texas Intermediate Crude trading at approximately $39.
  • China’s coal consumption has recovered from its lows, with minor variations around the normal level.
  • Gold has come down from its highs but remains elevated at about $1,900 per ounce.

Corporate Health:

  • JUST Capital, an ESG data provider, shows that the top companies are investing in remote work, modified schedules, health and safety, and supply-chain efficiencies to cope with continued COVID-19 pressures.
  • Per Bloomberg consensus, 2020 earnings-per-share estimates have improved slightly from their lows for both the US (based on the S&P 500 Index) and world (MSCI World Index). But the market remains focused on 2021 earnings, with US stocks trading at about 20 times earnings and global stocks at about 19 times.

Scott Krauthamer is Global Head of Product Management and Strategy at AB. Jonathan Berkow is Senior Quantitative Research Analyst and Alternative Data Lead for Equities at AB.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to change over time.

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