The hockey legend Wayne Gretzky summed up his approach in one sentence: “Skate to where the puck is going, not to where it has been.”
The quote has probably been used — and abused — by tens of thousands of corporate executives.
But the quote is popular because it captures an important idea. To be competitive and prepared, you have to be in tune with what is likely to happen next — not what happened yesterday.
For markets as of April 2020, the “puck” is the pandemic, and “where the puck is going” refers to pandemic-related fallout and our national response. We need to be ready for what happens next.
In that light, ask yourself:
- How will consumer psychology be impacted when nearly all Americans wear masks in public?
- What will happen to consumer psychology if domestic travel bans are enacted in the United States, shutting off regions of the country in a manner not seen since the Civil War?
The questions matter because both are highly likely now.
On public mask-wearing, the New York Times reports:
Top officials at the Centers for Disease Control and Prevention are pushing for President Trump to advise everyone — even people who appear to be healthy — to wear a mask when shopping at the grocery store or in other public places.
The issue has become more urgent since the CDC’s director, Dr. Robert Redfield, said that as many as a quarter of those already infected may show no symptoms, but still contribute to “significant” transmission.
But some White House officials have resisted, according to a top CDC official who has seen emails from people in the West Wing. The official said that people around Mr. Trump are pressing him to limit the mask-wearing guidance only to people in “areas of widespread transmission.”
That has CDC officials worried because the virus has already spread, largely undetected, to most parts of the country…
The science is clear on masks: In the midst of a pandemic, wearing them in public is a good idea.
That is why public mask-wearing is common in multiple Asian countries, where COVID-19 was not the first pandemic-type disease they have had to fight.
If everybody wears a mask, we see the following benefits:
- Those who are infected have a lower chance of infecting others by accident. The mask helps protect others, not just the person wearing it. This is important because a large number of carriers are asymptomatic, meaning they don’t show symptoms and may not realize they are spreaders.
- Those who aren’t infected reduce the odds of getting infected. While there has been a great deal of debate on whether the virus is airborne, the evidence points to aerosolized droplets that can project several feet or hang in the air for extended periods. A partial defense is better than nothing; even a 50% level of defense, via simple cloth barrier, is better than no defense at all.
- There is increasing evidence that “viral load” makes a difference. If you start with a small quantity of the virus, your immune system has a better chance of fighting it off. If you start with a large quantity, the virus can overwhelm your immune system, in the same manner a spike of COVID-19 cases overwhelms hospital systems. Even if the virus gets in, a mask reduces the load.
For America as a country, the psychological adjustment is ongoing. Thirty days ago, few would have believed the images and stories coming out of New York were even possible.
But the adjustment is still incremental, and Americans are embracing reality in stages.
When the White House tells everyone to wear masks — or at minimum, when they say everyone in “hotspot” areas of the country should wear them — another level of awareness will sink in.
An official public-mask-wearing recommendation has not been given as of 4 p.m. Eastern, April 3, but the odds are high it is coming. It may have arrived by the time you read this.
But masks, as shocking as it will be to look around and see them everywhere, are just a small part of this.
For instance, consider the following:
- Putting the fatality rate aside, the COVID-19 hospitalization rate is in the neighborhood of 20%. For some U.S. states with vulnerable populations due to widespread preconditions — like obesity, diabetes, and hypertension — hospitalization rates are running above 30%.
- Among those infected who don’t require hospitalization, many will feel severely ill for an extended period: Constant fever, chills, tremors and so on.
- Because hospital systems are going to be overwhelmed or filled to near-capacity in almost every state, many individuals will choose to ride out their sickness at home.
At some point soon, the math suggests almost everyone in the United States will know family, friends, or colleagues who were either hospitalized by COVID-19, quarantined at home with chills and fever, or passed away from it.
All of this is going to have a significant impact on America’s psyche. And for most of the country, it still hasn’t hit yet. Stories on the news are one thing. The next stage is COVID-19 on their doorstep.
And then you’ve got the domestic travel bans.
As coronavirus hot spots flare up across the United States, in city after city and state after state — Florida, Georgia, Texas, Michigan, Arizona, and more — domestic travel bans seem inevitable.
It is one thing to have movement restricted between countries. It will be another thing entirely, and a shock to the nation’s psyche, to see it domestically and within the United States.
And if you think that’s crazy, guess what — the early versions have already started. The below reporting, from CBS Miami a few days ago, is a foreshadow of what’s to come:
Florida Gov. Ron DeSantis on Saturday announced the creation of an Interstate 95 checkpoint on Florida’s northern border to screen motorists traveling from the New York City area, in an effort to contain the spread of the novel coronavirus.
Saturday’s announcement came a day after DeSantis said he was setting up a similar checkpoint in Northwest Florida, targeting travelers from Louisiana.
The I-95 checkpoint is an expansion of screenings already underway at certain Florida airports aimed at people coming from the tri-state area around New York City…
Because New York and Louisiana are ahead of Florida, steps were taken to “stop the spread” created by travelers to Florida.
Whether Florida’s actions were “too little, too late” is beside the point when it comes to future actions. Decisions will become more draconian as hotspots spread to new cities.
It starts with checkpoints and airport screenings. But the next step is outright travel bans.
The United States is also unique in that case loads are set to peak in different states at different times, with different degrees of intensity.
The U.S. is also unique in that, with regard to pandemic response measures, some states responded early and aggressively, while others responded late or hardly at all.
As a result of this, the U.S. will likely be sorted into “green zones” and “red zones” over time. The labels might be different, but the gist will look like this:
- “Green zones” will be states and regions where concentrations of the virus are low and hospital systems are functional or near-functional. California and the Pacific Northwest could become a green zone, for example, because aggressive containment measures were taken there early on.
- “Red zones” will be states and regions where virus concentrations are high and hospital systems are overwhelmed. At the time of this writing, there are multiple cities and regions turning into hotspots and thus into red zones. It is too late for containment in most of these places.
As the nation sorts into green zones and red zones, the green zones will be vulnerable to new infection.
If social distancing measures are lifted, and life starts to look normal, and then a critical mass of red zone travelers bring new infection to a green zone area, the green will turn red, and all of the hard-fought containment gains will succumb to a new breakout.
Americans who live in green zones, in other words, will be prone to turning red if red zone travelers are allowed in — hence the very high likelihood of domestic travel bans.
This is going to be an unsettling experience. Americans have never known barriers within their own country. The United States has been blessed in that, apart from 9/11, conflicts have played out overseas.
We have to reach back to the Civil War to find a time when individual U.S. states, and entire regions of the country, had such potential to feel alienated from each other.
Then, too, we don’t have to wait for the psychology of division to show up. It’s already here.
As New Yorkers flee their city to second homes and vacation homes, surrounding areas are fearing their arrival — and demanding they turn back.
“[New York] city is pandemic central,” the Washington Post reports, “and New Yorkers have become the face of the fearsome infection — virtual pariahs whose potential arrival has spurred anxious demands for roadblocks up and down the East Coast.”
New York will not remain the sole face of the pandemic for long. Not when Detroit, New Orleans, Atlanta, Houston, Orlando, and others could follow in its footsteps.
As hotspots expand, and green zone regions sense an increasingly divergent path from red zones, the call for domestic travel bans could become deafening.
You’ll want to be prepared — and don’t expect the stock market to ignore this.