BofA with the note:
The clouds are parting
The COVID Delta clouds are passing and the sun is starting to shine again. Our high frequency economic indicators are inflecting higher, the economic data surprise index has turned and the bond market has taken notice. We think 3Q will prove to be the soft patch in the year and growth will accelerate in the fourth quarter back to 6%. The risk – and it is a big one – is whether the supply side can handle the turn higher in demand.
Let’s start with the virus numbers as the Delta wave was the key culprit for the summer slowdown. The data are encouraging: the 7-day moving average of COVID cases was 108.8k in the week ending September 27, down 31.5% from the peak on Sep 1. Cases are down 16.3% week-over-week and falling particularly quickly (-22% w-o-w) in the South, which was hit the hardest. The high frequency economic data are also pointing to a turnaround in the leisure sector:
1. Seated diners on the…