Sunbelt COVID Flare Ups Hurt Us Too

Anthony J. Ogorek | Ed.D., CFP®

Anthony J. Ogorek | Ed.D., CFP®

With hospital systems in economically significant southern states in crisis mode, trying to deal with an explosion of coronavirus patients, we wanted to take a closer look at the impact these states could have on an eventual reopening of the economy. Here’s what we found:

  • The latest flare up of coronavirus is concentrated in economically significant states in the Sunbelt.
  • California, Texas, Florida and Arizona represent 30% of U.S. GDP.
  • We cannot have a meaningful reopening of the national economy until virus levels are dramatically reduced and stay down in these key states.
  • Even though WNY has done a relatively good job of containing the coronavirus, local economic recovery is dependent on a national recovery (see Delaware North Corp.).


As wealth managers, we are obviously concerned with how these developments may impact the lives of our clients. While our crystal ball is in the shop for repairs, it seems the following conclusions have a better than even probability of playing out:

  • The longevity of the stock market’s rise since the March 23rd low may now be called into question.
  • The second half of the year may prove to be more treacherous for the stock market.
  • If shutdowns are required in states accounting for 30% of U.S. GDP, local jobs will not be immune from further cuts (see New Era).

Do not mistake stock market performance as a proxy for the economy. The economy is on life-support. The failed reopening of southern states raises the specter that the political will to continue to support the economy may fade as initial support programs begin to expire (unemployment insurance, student loan forbearance, lease forbearance, PPP, airline support, etc.).


A map showing which states are contributing most to the U.S. GDP

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Ogorek Wealth Management, LLC

Ogorek Wealth Management, LLC