by Bryan Perry

March 24, 2020

The 1979 film of the 1968 musical Hair was nominated for two Golden Globes, Best Motion Picture, and New Star of the Year (for Treat Williams). The movie ends with a powerful song, “Let the Sunshine In.”

For whatever reason, this tune came to mind after reading some articles over the weekend about how something as simple as higher exposure to sunlight can perhaps kill off the coronavirus.

As all the laboratory science in the world has been marshaled against this virus, and all the money that is being created to avoid a global economic depression, wouldn’t it be amazing if the plateauing of the now familiar COVID-19 growth curve could result from the advent of spring, warm air, and more sunshine?

The first day of spring was officially declared last Thursday, March 19, which happens to be the earliest starting date in the last 124 years. Some commentators have suggested that warmer weather would help weaken the spread of coronavirus, perhaps as early as April, but there is no consensus from scientists and physicians as to whether a change in the weather will have a positive impact on stopping the coronavirus.

What scientists and physicians do know, however, is that increased sunlight and warmer temperatures have been shown to disrupt the transmission of some viruses. Since COVID-19 has only existed for three months, the scientific research is too early to make any credible claims for its reaction to warm weather.

As the sun’s arc across the Northern hemisphere lengthens, the amount of ultraviolet light from the sun will increase rapidly. Ultraviolet light and warmth have been shown to disrupt the transmission of some viruses, but whether it will work with coronavirus is unknown. From a very insightful article (“Spring Equinox: Will season’s longer days, stronger sunlight, warmer air help kill coronavirus?” available at NorthJersey.com – March 20, 2020), here is part of their conclusion, via quote (and paraphrase):

“Andrew Marshall, a molecular virologist at Loyola University Maryland, said that it’s possible that increased sunlight can destroy the COVID-19 virus. Coronavirus is an ‘enveloped virus’ which are more sensitive to UV rays and warmth, Marshall said. ‘UV rays either mutate or modify the DNA or RNA of these viruses, which leads to instability and death of the virus,’ he said.”

“Viruses that cause influenza and the common cold spread more rapidly among humans in winter thanks in part to dry air, weaker immune systems and more time spent indoors. Anna Yeung-Cheung, a virologist at Manhattanville College, said viruses suffer in warmer weather because the immune system receives a boost with increased vitamin D from sunlight.”

Let the Sunshine In Image

“In the Southern Hemisphere, which just finished summer, coronavirus has not spread nearly as rapidly as it has in the northern part of the globe. How much of that is due to weather is not yet known. ‘The reason why viral infections go down in spring and summer is that your immunity does a lot better in warmer weather,’ she said.”

“People still get sick in warm weather and we’ve seen coronavirus spread in places like Singapore but not nearly as much,’ Yeung-Cheung said. ‘Warm weather has something to do with it. Hopefully, that’s the case with coronavirus here and we see the rates decline.’ ‘It is indeed possible that the [coronavirus] will taper off during the warmer months,’ Marshall said. ‘But as of now, a definitive answer remains elusive.’”

Anecdotal evidence from my own neighborhood shows a marked increase of residents walking, running, and biking outside. I would even say it’s an exponential increase, with many people working out in their garages. According to Dr. Gochfeld, a professor emeritus at Rutgers’ Robert Wood Johnson Medical School, “The potentially good news is that as people spend more time outdoors, there is less transmission than indoors because of dissipation by air currents not present indoors.” Having said this, Dr. Gochfeld was careful to add, “Still, social distancing would be an important factor.”

So, what does all this discussion have to do with investing for income? Well, after watching the bottom fall out of all fixed income markets, with Treasuries being the exception, a bit of sunshine returned to the Investment Grade corporate bond market late last week, even as stocks closed at their lows of the current correction. This was also true for the Investment Grade Preferred Debt market as well, where some rays of sunshine appeared late last week, while junk debt remained a source of funds.

Investment Grade Corporate Bond Exchange Traded Fund Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

What typically and historically occurs in the earliest days of a market finding a bottom, then establishing a base and emerging from a steep correction, is that investment grade debt that has been hammered by 20%+, starts to rebound – exhibiting the first signs of a shift in sentiment from “doom and gloom” to one of “the world isn’t coming to an end.” This shift needs to build on itself this week – in a meaningful way.

Stocks will follow the trend of the debt markets and if there is new life in the top-tier corporate, mortgage, convertible, and preferred asset classes, then and only then, will a sustainable rally materialize. Hopefully, debt markets will respond favorably to the massive Congressional fiscal stimulus package now brewing.

The S&P closed last week at 2,305, which is below the Christmas 2018 low, representing a market drop of nearly 33%. Not to belittle the damage done, this is an average drop during economic recessions. Since the December 2018 lows were breached, the S&P is prone for an additional 10% to 15% downside, so this week is crucial for the debt markets to pivot higher – so the sun can shine on us yet again.

No matter what the markets bring us this week, it’s nice to know that maybe, just maybe, a big dose of Vitamin D might be the best thing we can all look to for relief from the virus. That implies getting outside as much as possible and keeping a positive mental attitude – which might include some upbeat music.

Consider the following sunshine songs as background music for a better week ahead:

Good Day Sunshine (and Here Comes the Sun) – by The Beatles
Island in The Sun – Weezer
Pocketful of Sunshine – Natasha Bedingfield
Soak Up the Sun – Sheryl Crow
Sunshine Superman – Donovan
Sunshine of Your Love – Cream
Sunshine on My Shoulders – John Denver
Steal My Sunshine – Len
Trip Around the Sun – Kenny Chesney
Walking on Sunshine – Katrina & The Waves
When the Sun Comes Out – Barbra Streisand
You Are the Sunshine of My Life – Stevie Wonder
You Are My Sunshine – Johnny Cash

All content above represents the opinion of Bryan Perry of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
The U.S. Dollar Is at An All-Time High

Sector Spotlight by Jason Bodner
The Market Officially Turned “Oversold” Last Week

View Full Archive
Read Past Issues Here

About The Author

Bryan Perry

Bryan Perry
SENIOR DIRECTOR

Bryan Perry is a Senior Director with Navellier Private Client Group, advising and facilitating high net worth investors in the pursuit of their financial goals.

Bryan’s financial services career spanning the past three decades includes over 20 years of wealth management experience with Wall Street firms that include Bear Stearns, Lehman Brothers and Paine Webber, working with both retail and institutional clients. Bryan earned a B.A. in Political Science from Virginia Polytechnic Institute & State University and currently holds a Series 65 license. All content of “Income Mail” represents the opinion of Bryan Perry

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