Breaking New

Huge November gains may make the usual year-end ‘Santa Claus rally’ less likely

Santa Claus pays a visit on the floor at the New York Stock Exchange.

Brendan Mcdermid | Reuters

A big year-end rally? Don’t get too excited yet.

December is traditionally an up month: Since 1945, the S&P 500 rose nearly 1.5% in all Decembers and advanced in price 73% of the time, according to Sam Stovall at CFRA Research.

But hopes for the usual “Santa Claus rally” may have to be tempered a bit this year.

For one, there is the powerful November rally.

The S&P 500 in November is closing up 11.2%, the fourth biggest gain of all time but only the second biggest gain this year, after April, with a gain of 12.7%.

However, a powerful November rally like the one we have just had often causes problems with the usual year-end “Santa Claus rally,” according to Stovall.

History “suggests that this November’s surge may end up ‘stealing from Santa,'” he wrote in a recent note to clients. Whenever the S&P 500 was up by 5%+ in November, the market posted a sub-par average rise and frequency of gain in December.”

Huge November gains

November catalyzed a move into cyclical/value stocks that was much more powerful and sustained than previous value rallies, with significant gains in traditional value sectors like energy and banks, as well gains in broader cyclical groups like industrials and materials. However, growth (technology) has not seen significant selling, as many investors are still skeptical about the value rotation. While defensive/consumer groups like Health Care and Consumer Staples have lagged, they too have produced healthy mid-single digit gains.

This has created the Goldilocks scenario we see now. 

Style investing in November

  • Value:   up 14%
  • Growth:  up 9%

Sectors in November:

  • Energy: up 34%
  • Banks: up 20%
  • Industrials: up 17%
  • Materials: up 13%
  • Technology:  up 10%
  • Communication Services: up 10%
  • Cons. Discretionary: up 9%
  • Cons. Staples: up 8%
  • REITs: up 7%
  • Health Care: up 7%
  • Utilities: up 3%

What, me worry?

Stress testing the Goldilocks scenario

Markets have rallied around four “buckets:”

1) The reopening: The market is acting like the Covid Winter we are entering will be a minor bump on the road to the Spring reopening and that global reflation is now imminent.

UBS’ Art Cashin is not so sure about the smooth transition to the spring reopening. 

“There are lots of little things that could go wrong in the next several months,” he told me. “Everyone is assuming a smooth vaccine, a smooth transfer of power.” 

None of that is assured, he told me. His biggest concern is geopolitical: “We have a brand new President coming in, there’s been an assassination in Iran, and this new President is going to get tested very quickly, particularly in the Middle East.”

2) Stimulus: The politics of striking a big stimulus deal before the January 5th Senate run-off in Georgia seem increasingly remote.  There is some hope that some limited stimulus may be put in a December 11 budget deal.  But large stimulus bills seem very remote: reports over the weekend indicate that Senate Republicans may now pursue austerity measures in 2021 to curb the deficit.

3) The Georgia Senate races: Veteran trader Joe Zicherman of Stadium Capital has had a profitable year but has options covering his long positions, and has recently bought late January and late March puts.  

The reason: “If the perception occurs that the Democrats are going to win the two Georgia races and the Republicans lose the Senate, and everyone believes corporate and personal taxes are going up, than the market is 25% overpriced,” he told me.

He also noted that there is an abnormally high level of speculative money in the market. “People are buying garbage, and that’s always a sign that people can’t find value.”

3) Vaccine:  The market assumption that vaccine distribution will proceed in a smooth series of rollouts culminating in mass distribution in the early part of the second quarter next year is also questionable, as Cashin has pointed out.  

Former Treasury Secretary Larry Summers believes that by next September enough people will be vaccinated that the pandemic will not be a mega-factor in the economy, but worries that “something could go wrong with the vaccination process,” he said on “Wall Street Week” over the weekend. “The virus could mutate, a new virus could come along, it could turn out that people who have had Covid have more lasting after-effects than we appreciate today, so there are some real risks associated with the long-run playout of Covid.”

4) Valuation: Growth forecasts are being lowered for Q4 2019 and Q1 2020, and there has been little change in the past several weeks in Q4 or Q1 earnings growth for the S&P 500, a reversal of trends earlier in the year, when earnings estimates were rising rapidly.

Cashin, who has seen his fair share of irrational market exuberance in his 60 years on the floor of the NYSE, says traders have levitated themselves into believing in the glorious Spring reopening: “They are buying the reopening package because they are reassuring themselves, ‘I’m not buying for tomorrow, I’m buying for six months from now.’  And maybe that’s right,” he told me, but a lot could go wrong between now and the glorious Spring reopening.

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Breaking New

Dow falls more than 150 points as rally to record highs takes a breather

U.S. stocks fell on Tuesday as the market’s recent rally cooled off amid a sharp decline in drug store shares and disappointing economic data.

The Dow Jones Industrial Average dropped 197 points, or 0.7%. The S&P 500 dipped 0.6%, while the Nasdaq Composite fell 0.3%.

Shares of pharmacy owner CVS Health and Dow-member Walgreens Boots Alliance dropped after Amazon launched a pharmacy business, which allows free delivery of medications for Prime members. Walgreens shares dropped 9.1% and CVS lost 8.8%. Amazon shares gained 0.3%.

Home Depot added to the decline, falling 2.7% despite a third-quarter earnings beat. Its sales also surged about 24% compared with a year ago as pandemic home improvement buying continued.

Sentiment also took a hit after data showed retail sales increased less than expected in October. Retail sales rose 0.3% last month, versus a 0.5% gain expected by economists polled by Dow Jones.

Tesla shares bucked the market’s negative trend. jumping 7.9% after S&P Dow Jones Indices said the electric car maker would join the S&P 500 index, effective Dec. 21. It was a long anticipated move for the surging stock. Before Monday, the shares had already more than quadrupled this year.

Tuesday’s moves came a day after the Dow and S&P 500 both set fresh record closing highs.

“We just reached new highs, so it’s natural for the market to take a breather, and the slightly disappointing read on the retail sales front is facilitating that,” said Chris Larkin, managing director of trading and investment product at E-Trade. “Without stimulus checks coming in, there’s a bit of uncertainty in this sector in the short term.”

On Monday, the Dow and S&P 500 closed at record levels after Moderna released trial data showing its coronavirus vaccine was more than 94% effective, further raising expectations of a sharp economic recovery.

That marked the second positive announcement related to a coronavirus vaccine in a week. Pfizer and BioNTech said Nov. 9 that their Covid-19 vaccine candidate was more than 90% effective among participants in a late-stage trial.

Value stocks led the advance on Monday, building on their strong gains from last week. The iShares Russell 1000 Value ETF (IWD) jumped 1.9%, while its growth counterpart closed higher by just 0.5%. Value names lagged growth on Tuesday, however, as IWD fell 0.5% and the iShares Russell 1000 Growth ETF (IWF) traded 0.2% lower.

“Value and smaller companies typically have more leverage to economic recoveries so a vaccine that would remove the weight of COVID-19 off the economy is a distinct positive,” wrote Bill Stone, chief investment officer at Stone Investment Partners. “Time will tell if this reversal in trends proves durable or starts “makin’ the tears rain down like a monsoon” for value proponents like the many recent false starts.”

The recent outperformance in value stocks comes even as the number of coronavirus cases continues to increase, dampening the country’s near-term economic outlook.

A survey conducted by Bank of America found that fund managers gave gotten too optimistic about the prospects of a coronavirus vaccine, leading the bank’s top strategists to suggest investors sell the news on those developments.

— CNBC’s Yun Li contributed reporting.

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Breaking New

U.S. stock futures rise after Biden win as post-election rally continues

Democratic 2020 U.S. presidential nominee Joe Biden points a finger at his election rally, after news media announced that Biden has won the 2020 U.S. presidential election, in Wilmington, Delaware, U.S., November 7, 2020.

Kevin Lemarque | Reuters

Stocks were set to continue their big post-election rally as futures rose in early morning trading Monday. The gains came as Democrat Joe Biden defeated incumbent Donald Trump in the U.S. presidential race to become president elect, according to NBC projections.

Futures on the Dow Jones Industrial Average rose 333 points, implying an opening gain of about 318 points on Monday. S&P 500 futures and Nasdaq 100 futures also both traded in positive territory.

The former vice president won after his projected victory in Pennsylvania as well as Nevada, according to NBC News projections on Saturday. The call came four days after Election Day and amid close counts in several battleground states.

Wall Street hoped the call would reduce the odds of a drawn-out election fight, even as Trump refused to concede. Many traders had put on bets for market volatility in November and were unwinding those positions, helping fuel a rally.

In the meantime, the chances of a “blue wave” that sweeps Democrats into the majority of both the Senate and the House have waned, meaning drastic policy changes such as tax hikes are less likely.

“A Biden presidency with a Republican Senate would be unlikely to see any increase in taxes, which was arguably the biggest fear investors had about a Biden presidency,” Brian Levitt, global market strategist at Invesco, said in a note on Sunday. “And a Biden presidency could mean a return to a more traditional, predictable approach to trade policy, which would likely result in less volatile markets.”

Democrats are projected to keep their House majority, although Wall Street was watching closely as Senate control is still in limbo. Both of Georgia’s Senate races are likely going to runoffs slated for early January.

Wall Street had rallied in the past week in anticipation for such a gridlocked government and was set to build on that rally as it gained clarity in the presidential race. All three major averages just notched their best weekly performance since April. The S&P 500 and Nasdaq jumped 7.3% and 9%, respectively, last week, while the Dow rose 6.9%. The S&P 500 also posted its biggest election week gain since 1932.

Tech was the biggest winner last week among the 11 S&P 500 sectors, surging 9.7%. Investors piled into the high-growth group as the prospect of higher taxes and tighter regulations under a Democratic sweep decreased.

Trump rejects outcome

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Breaking New

Stock futures are flat after Tuesday’s rally as traders await U.S. election results

Election officials count absentee ballots at a polling place located in the Town of Beloit fire station on November 03, 2020 near Beloit, Wisconsin.

Scott Olson | Getty Images

Stock futures were flat on Tuesday night following a sharp rally during regular trading while investors awaited the result of the presidential election.

Dow Jones Industrial Average futures traded 56 points lower, or 0.2%. S&P 500 futures dipped 0.1% and Nasdaq 100 futures rose slightly. Earlier in the evening, Dow futures had jumped more than 250 points.

President Donald Trump will win the presidential vote in Indiana and Kentucky, NBC News projects. Florida and Pennsylvania were too early to call. Former Vice President Joe Biden is projected to win Vermont, Delaware, Maryland and Massachusetts, according to NBC News. Polls in Arizona, Colorado and New York were scheduled to close at 9 p.m. ET.

Earlier in the day, the Dow popped more than 500 points, or 2.1%. The S&P 500 gained 1.8% and the Nasdaq Composite advanced 1.9%. Those gains added to Monday’s strong performance.

This week’s market moves come as investors hoped a delayed, or contested, U.S. presidential election result would be avoided and a clear winner would emerge Tuesday night.

“This most recent uptick in prices seems to be a ‘clarity rally’ as investors look forward to finally having the election uncertainty overhang removed,” Adam Crisafulli, founder of Vital Knowledge, wrote in a note Tuesday.

Former Vice President Joe Biden was ahead of President Donald Trump in the polls leading up to Tuesday. Wall Street is also watching some key Senate races, which could lead to Democrats taking control of Congress.

Investors are betting that a so-called blue wave — a scenario in which Democrats win the White House, obtain a Senate majority and keep control of the House — could facilitate the passing of new fiscal stimulus as the economy continues its recovery from the coronavirus pandemic.

“I think that no matter who wins, you have a quick dip and you have to buy,” CNBC’s Jim Cramer said earlier on Tuesday.

The S&P 500 lost 0.4%, on average, the day after presidential elections, according to Baird.

Chao Ma of the Wells Fargo Investment Institute thinks investors with a longer time horizon should not worry too much about the election’s impact on the broader market.

“The history of the economy and the S&P 500 Index suggests that a president’s party affiliation has made little difference when it comes to long-term returns,” said the firm’s global portfolio and investment strategist. “The long-term drivers of the S&P 500 index have been the economy and business earnings, and we expect that to continue to be the case … beyond the 2020 elections.”

One year out from a presidential election, the S&P 500 averaged a return of more than 8%, according to the Baird data back to 1960.

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At late-night rally, Trump suggests he may fire Fauci ‘after the election.’

President Trump suggested at a rally early Monday morning that he might fire Dr. Anthony S. Fauci after Election Day, further escalating the tension between his administration and the nation’s top infectious disease expert as the number of new coronavirus cases in the United States reaches record highs.

Mr. Trump spoke well past midnight at the Miami-Opa Locka Executive Airport in Florida at his fifth and final rally of the day. At one point, he began reciting a familiar complaint about the news media’s continued coverage of the virus.

His grousing led the crowd of his supporters to begin chanting, “Fire Fauci! Fire Fauci!” Mr. Trump listened in silence for a few moments before remarking: “Don’t tell anybody, but let me wait until a little bit after the election. I appreciate the advice.”

That assertion is strongly disputed by Dr. Fauci, who told the The Washington Post in an interview published on Saturday that the United States “could not possibly be positioned more poorly” as it heads into winter. A White House spokesman later called Dr. Fauci’s comments “unacceptable.”

Former Vice President Joseph R. Biden Jr., the Democratic nominee, has said repeatedly that if he were to win the presidency, he is hopeful Dr. Fauci would remain in his role and serve in his administration.

Mr. Trump’s quip about Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases, was part of an hourlong mix of meanspirited jokes, misstatements, hyperbole, self-congratulation and occasional on-script arguments he made for his re-election.

Mr. Trump has adopted Florida as his home turf, and it is a swing state that he desperately needs to win to open paths to another four-year term. Although he narrowly prevailed there in 2016, polls, including one released Sunday by The New York Times and Siena College, have shown him trailing Mr. Biden in a tight race.

Roughly 8.7 million Floridians had already voted as of Sunday, according to the U.S. Elections Project, almost two-thirds of all registered voters in the state. But at least as of Sunday night, turnout among Black and Hispanic voters, both key groups for Democrats, has been lagging in Miami-Dade County, the most populous county in the state.

In a sign of how important South Florida is to the Biden campaign, Senator Kamala Harris, Mr. Biden’s running mate, visited the region on Saturday, and former President Barack Obama is scheduled to campaign there for Mr. Biden on Monday.

“We win Florida,” Mr. Trump said at the rally, “we win the whole thing.”

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Trump Accidentally Stumbles Into The Truth During Pennsylvania Rally

During a bizarre rally in Pennsylvania on Tuesday night, Donald Trump momentarily stumbled into the truth as he came to the realization that “nobody” really likes him.

As the president was ticking through a short list of people that he says don’t want him to be reelected, he concluded by saying, “Nobody wants me. Nobody.”

For a brief moment in time, Trump appeared to do something that’s almost unheard of at his MAGA rallies: Tell the truth.

“What I’ve gone through – the drug companies, they’re spending a fortune on fake ads. They don’t want me. They don’t want me. China doesn’t want me. Iran doesn’t want me. Nobody wants me. Nobody,” he said.

Fact check: True.

Of course, Trump quickly snapped out of it when his cult-like crowd of supporters cheered that they, in fact, want him, to which Trump responded, “Erie wants me. Erie wants me.”


Trump is the president America never wanted

Donald Trump may have eked out an Electoral College victory four years ago, but a majority of the American people didn’t choose him as their preferred candidate to lead the country.

Since taking office, Trump hasn’t spent a single day trying to appeal to those who didn’t support him in 2016. It’s been four years of riling up the MAGA base with hateful rhetoric and inhumane policies.

It’s no surprise then that Trump is the first president in the modern polling era to not achieve a single day of majority approval throughout his first term.

So when the president briefly admitted that “nobody wants” him during a rally in Pennsylvania on Tuesday night, he was actually telling the truth.

Donald Trump is the president that America never wanted.

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Trump Rally Designated As A Coronavirus Outbreak

Public health officials in Minnesota have designated Donald Trump’s rally in the state a COVID outbreak after 20 people have been sickened.

CNN reported, “In Minnesota, public health officials say they’ve so far traced at least 20 cases of the virus back to a rally held by President Trump last month, or to related events. Of the 20 cases,16 are among people who attended the rally. Four people said they participated in counter-protests the same day, the state’s health department told CNN.

It has now been confirmed that Donald Trump’s rallies are causing coronavirus outbreaks and endangering public health. Not only is Trump not doing anything to keep Americans safe during the pandemic, but he is also actively working to make more people sick and the virus stronger.

Trump thinks that he is showing strength and winning by holding these rallies, but what most voters in swing states see when Trump comes to their town is a president doesn’t care about keeping people healthy.

People are getting sick because Donald Trump only cares about himself. The example that Trump is setting is literally spreading the virus and proving to America that he is a danger to the health of every city and state that he visits.

For more discussion about this story join our Rachel Maddow and MSNBC group.

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How the Sturgis Motorcycle Rally may have spread coronavirus across the Upper Midwest

A lifelong motorcycle enthusiast, the 50-year-old construction worker and father of five had been determined to go to the Sturgis Motorcycle Rally, a holy grail for bikers. Even when his girlfriend, Angie Balcom, decided to stay back because she was worried about being around so many people during a pandemic, Cervantes was adamant about going.

“I don’t think there was nothing that was going to stop me,” he said.

Back home, Cervantes took Tylenol for his throat and went to bed early. But he woke up the next morning coughing so hard he struggled to catch his breath. Over the next few days, the pain in his chest made him fear that his heart might stop, and a test later confirmed he had the novel coronavirus, which causes the disease covid-19. He was admitted to the hospital 11 days later, on Aug. 27. Soon, his girlfriend and his sister were sick, and Cervantes was going over everything he did and every place he visited in Sturgis, wondering where the virus had found him.

Within weeks of the gathering, the Dakotas, along with Wyoming, Minnesota and Montana, were leading the nation in new coronavirus infections per capita. The surge was especially pronounced in North and South Dakota, where cases and hospitalization rates continued their juggernaut rise into October. Experts say they will never be able to determine how many of those cases originated at the 10-day rally, given the failure of state and local health officials to identify and monitor attendees returning home, or to trace chains of transmission after people got sick. Some, however, believe the nearly 500,000-person gathering played a role in the outbreak now consuming the Upper Midwest.

More than 330 coronavirus cases and one death were directly linked to the rally as of mid-September, according to a Washington Post survey of health departments in 23 states that provided information. But experts say that tally represents just the tip of the iceberg, since contact tracing often doesn’t capture the source of an infection, and asymptomatic spread goes unnoticed.

In many ways, Sturgis is an object lesson in the patchwork U.S. response to a virus that has proved remarkably adept at exploiting such gaps to become resurgent. While some states and localities banned even relatively small groups of people, others, like South Dakota, imposed no restrictions — in this case allowing the largest gathering of people in the United States and perhaps anywhere in the world amid the pandemic and creating huge vulnerabilities as tens of thousands of attendees traveled back home to every state in the nation.

Many went unmasked to an event public health officials pleaded with them to skip, putting themselves and others at risk, because they were skeptical about the risks, or felt the entreaties infringed on their personal liberties. Rallygoers jammed bars, restaurants, tattoo parlors and concert venues; South Dakota officials later identified four such businesses as sites of potential exposure after learning that infected people had visited them.

Despite the concerns expressed by health experts ahead of the event, efforts to urge returnees to self-quarantine lacked enforcement clout and were largely unsuccessful, and the work by state and local officials to identify chains of transmission and stop them was inconsistent and uncoordinated.

Those efforts became further complicated when some suspected of having the virus refused to be tested, said Kris Ehresmann, director of infectious-disease epidemiology at the Minnesota Department of Health.

Such challenges made it all but impossible to trace the infections attendees may have spread to others after they got home. Several infections tied to a wedding in Minnesota, for instance, “linked back to someone who had gone to Sturgis,” Ehresmann said. Those were not tallied with the Sturgis outbreak because “the web just gets too complicated,” she said.

“When it comes to infectious diseases, it’s often the case that the weakest link in the chain is a risk to everybody,” said Josh Michaud, an epidemiologist and associate director for global health policy for the nonprofit Kaiser Family Foundation. “Holding a half-million-person rally in the midst of a pandemic is emblematic of a nation as a whole that maybe isn’t taking [the novel coronavirus] as seriously as we should.”

The Aug. 7-16 gathering has drawn intense interest from scientists and health officials, and will likely be studied for years to come because of its singularity. It’s not just that Sturgis went on after the pandemic sidelined most everything else. It also drew people from across the country, all of them converging on one region, packing the small city’s Main Street and the bars and restaurants along it. And in contrast with participants in the Black Lives Matter protests this summer, many Sturgis attendees spent time clustered indoors at bars, restaurants and tattoo parlors, where experts say the virus is most likely to spread, especially among those without masks.

Attendees came from every state, with just under half hailing from the Great Plains and substantial numbers journeying from as far as California, Illinois and Arizona, according to an analysis by the Center for New Data, a nonprofit group that uses cellphone location data to tackle public issues. The analysis, shared with The Washington Post, shows just how intertwined the South Dakota rally was with the rest of the country — and how far the decisions of individual attendees could have ricocheted.

Cervantes feels certain he got the virus from his Sturgis trip, and shared that with the contact tracer from the Two Rivers Public Health Department who phoned him after his case was recorded. Nebraska borders South Dakota, and health officials there expected they might see rally-related infections.

Yet his illness was not classified as a Sturgis case, suggesting that even under the best of circumstances, infections might go uncounted. With so much still unknown, it worries him to think people might look at the rally and conclude that massive events aren’t concerning after all — that the risk is worth it.

That was how he saw it before he got sick. He recalls having a fleeting thought as he guided his motorcycle through the turns of the famed Needles Highway two months ago, taking in the sweeping views and rock formations close enough to touch: “If I catch the virus and die, I will be a happy man. I have lived.”

He hadn’t imagined that within a matter of days, he would feel that death was hovering right at his door.

‘No right decision’

As the coronavirus scuttled gatherings big and small, from the 2020 Olympics to birthday parties, weddings and funerals, Sturgis officials mulled postponing this year’s rally. The event is synonymous with the 7,000-person city nestled amid state and national park land, where the Harley-Davidson Rally Point Plaza is a defining feature downtown.

But this year, a survey found that 60 percent of residents wanted the rally postponed. At council meetings, people lined up to argue. A nurse warned there wouldn’t be enough hospital beds if the event went forward, while a business owner said she would lose her building if it didn’t. Calling off this year’s rally, its 80th anniversary, would mean a loss of around $2 million for the city, authorities said. It had only been done during World War II.

“There absolutely was no right decision,” said city council member Terry Keszler.

Officials also knew that canceling would have been an uphill battle: South Dakota Gov. Kristi L. Noem, a Republican, was one of the few state leaders who never restricted mass gatherings, managing the pandemic by emphasizing personal responsibility over government mandates. Because the rally encompasses hundreds of miles beyond city limits, the council’s authority was limited.

Another concern was that crowds would come regardless of their decision, and, Keszler said, “we had to prepare for it, or it would have been such a mess it’s not even funny.”

The council ultimately voted to allow the event with the understanding that “the covid thing wasn’t going to stop people,” as Keszler put it.

That supposition was likely correct: There is evidence that those who ventured to Sturgis were engaging in riskier behavior than most Americans in response to the pandemic, by leaving home more often and covering more ground, according to the Center for New Data analysis.

Using data from X-Mode, a company that collects location information from smartphone users who grant permission to various apps, the Covid Alliance, a project of the Center for New Data, found 11,000 probable Sturgis rallygoers. The researchers analyzed where those individuals came from and their mobility during the pandemic and extrapolated information about others from them. On average, the analysis found, attendees spent less time at home than others before and after the event, and traveled twice the daily distance of non-rally goers, underscoring concerns about the potential for virus transmission.

That was true even in states where officials asked Sturgis attendees to quarantine after returning home, including Minnesota, New York and New Jersey.

“You can see it in the data,” said Steven Davenport, co-executive director of the Center for New Data. “And from a policy perspective, it’s not about blaming people. It’s about implementing policies that work and using data to learn from them.”

The data doesn’t show whether the rally attendees took other precautions, such as social distancing or wearing masks. It also doesn’t offer any context for their movement — it could be they had jobs that required leaving home or driving greater distances.

In interviews with The Post, several rally attendees said they didn’t deny the threat of the coronavirus but also didn’t believe they needed to stay home indefinitely. Some noted that they take risks each time they get on their bikes. A number said they wore masks or made other minor concessions but were determined to go on with their lives.

Kathy Colville and Darrell Hackler said they decided two weeks before the rally that this was the year they would cross it off their bucket list. The Round Hill, Va., couple reasoned they could lower their risk by wearing masks and sleeping in their RV.

“I believe that we’re going to be living with covid for a year, maybe more,” said Colville, 61. “And I personally would be stir-crazy nuts and divorced if I tried to quarantine in my house for that amount of time.”

Balcom, Cervantes’s girlfriend, made a different calculation. She had been excited to go to Sturgis with Cervantes, her brother and her dad. But her work as an occupational therapy assistant made the virus’s threat real to her, and she worried about the prospect of infecting clients. In the end, she and her family members canceled, leaving Cervantes to travel with friends.

“I said, ‘I’m not going to tell you you can’t go, because you wouldn’t do that to me,’” Balcom recalled telling him. “‘But I think it’s asinine. I don’t think it’s a good idea.’ And he was like, ‘I’m going to go.’”

‘A risk that they accepted’

The rally unfolded in August as it always had. Bikers revved their engines on Main Street and filled highways leading to sites like Custer State Park and Devils Tower. Bands played to shoulder-to-shoulder audiences, and bikini-wearing bartenders sold beer by the bucket. Hardly anyone wore a mask.

Among T-shirts hawked by vendors were ones that made mention of the virus keeping many Americans at home: “Screw covid-19, I went to Sturgis.”

In the run-up to the rally, officials estimated that 250,000 people would come. The actual number, according to the South Dakota Transportation Department, was over 460,000 — down just 7 percent from 2019.

They came in the greatest numbers from South Dakota, source of an estimated 93,000 attendees, or a fifth of the total, according to calculations by the Center for New Data. Minnesota ranked second, with an estimated 31,000 people, followed by Colorado with 29,000. Many traveled hundreds of miles: 21,000 rallygoers are believed to have come from Texas, and 20,800 from California.

Cervantes was one of an estimated 16,700 from Nebraska, which had the seventh-highest number of rallygoers. After a six-hour ride, he reached Sturgis before sunset on Thursday, almost a week into the rally.

“It was just exhilarating,” he said. “And then pulling down into Sturgis that Thursday night just blew me away.”

From the beginning, Cervantes recalled being struck by the lack of masks. On his ride from Nebraska, Balcom had chided him on a call after he acknowledged he hadn’t worn one at a gas station. He mostly kept one on after that — “Angie really drilled it into my head,” he said — and wondered whether everyone else would get sick.

Andrew Crerar of Ashburn, Va., said he wore a bandanna — “uniform 101 for people riding motorcycles” — but “you go into the grocery store and you could tell who was local and who wasn’t by who was wearing masks.”

Still, there were reminders of the pandemic: Hand sanitizing stations stood downtown, and Cervantes carved “2020: The Year of the Virus” into a table at his campground. The lead singer of Smash Mouth, a headliner in a year when Willie Nelson and ZZ Top canceled, shouted “F— that covid s—!”

“No one that I spoke to there wasn’t aware of coronavirus, and wasn’t aware that there was a risk of them being there,” Crerar said. “It was just a risk that they accepted.”

Cervantes spent much of his time on scenic rides, feeling moved when he went through a tunnel and Mount Rushmore came into view. He and his friends stopped at several stores and, on the final night of the rally, took a bus downtown to “party it up a little bit because it was our last night there.”

“I can say that there’s probably been a collective holding of breath,” Keszler, the city council member, said in early September. “This was my big concern, honestly, was what’s going to happen after.”

Virus’s uncertain path

What happened afterward was, in certain respects, very clear.

South Dakota, which had the most attendees, saw coronavirus cases surge within weeks of the rally’s Aug. 16 close, with the seven-day rolling average going from 84 on Aug. 6 to 214 on Aug. 27. The numbers remained elevated into October: The first day of the month, the seven-day rolling average was 434. The state is second in the nation in cases per capita behind North Dakota, with numbers high enough for the Harvard Global Health Institute to recommend stay-at-home orders.

But precisely how that outbreak unfolded remains shrouded in uncertainty.

Because symptoms of the coronavirus can take days to surface, rally attendees were unlikely to know they had been infected until returning home. Without a nationally coordinated contact-tracing strategy, the job of identifying chains of transmission was left to a patchwork of local and state health departments with varying approaches, leadership and staffing. Typically, such efforts focus on determining a person’s contacts after they became infectious — and stopping those people from spreading the virus — rather than on pinpointing the source of an infection.

Genomic sequencing, which other countries have harnessed to determine the path of an outbreak, has been underused in the United States. And because it requires culturing and sequencing active virus, the rally is too far in the past for it to be of service now, said Michaud, the Kaiser Family Foundation epidemiologist.

So even as the Dakotas and the Upper Midwest began seeing infections climb, it is impossible to say precisely how many of those cases originated at the rally — or how many of those might have ignited additional clusters elsewhere.

“This motorcycle rally was and is such a big thing that people come from miles and miles away and they come from right next door. And it’s not reported anywhere who they are, where they live,” said Benjamin Aaker, president of the South Dakota State Medical Association.

“Contact tracing on something like that is even harder than it is during normal circumstances,” he added.

But other countries offer examples of more robust and coordinated contact-tracing efforts, Michaud said. Japan uses what’s called retrospective contact tracing — working backward to determine where a person was infected and who else may have gotten the virus there, he said. It’s particularly effective in dealing with the coronavirus, which is often transmitted by a small number of people infecting many others in clusters.

It was “fairly obvious” that a gathering the size of the motorcycle rally represented a risk, Michaud said — and more rigorous contact tracing could have revealed the actual impact. It might also have prevented some of the secondary and tertiary spread.

Hospitals have seen the effects. David Basel, vice president of clinical quality at Avera Medical Group, which has locations on the east side of the state, said on Sept. 30 that facilities had been “busy, and we’re feeling it.” Covid-19 cases make up 10 percent of patients, he said.

“The thing that quite honestly scares us most is personnel,” he said. “If we started to lose personnel to them coming down with covid, that would be probably the biggest risk to us.”

Three of the four South Dakota counties estimated to have the highest share of Sturgis attendees also saw cases spike post-rally. The increase was most pronounced in Pennington County, which is just outside Sturgis. Its seven-day rolling average of new cases leaped from eight on Aug. 6 to 34 on Aug. 27.

State health officials, who linked 125 cases to Sturgis, have not tied the surge to the rally, however. They note it overlapped with school openings and end-of-summer restlessness.

“Anytime you’re bringing individuals together, you’re going to have times where you’re having covid-19 transmission,” state epidemiologist Joshua Clayton said last month. “That’s a risk whether you’re in South Dakota, or in other states.”

Noem, the governor, attributed the rise in cases to increases in testing, echoing President Trump’s explanation of growing U.S. infections. “That’s normal, that’s natural, that’s expected,” she told the Associated Press. She did not explain how extra testing could have accounted for the rise in hospitalizations in the state, which hit record highs in October.

And the increases in coronavirus infections spread beyond South Dakota, post-rally. In Crook County, Wyoming, Corinne Hoard started feeling sick a week afterward but isn’t sure whether she was infected there — or whether health officials counted her case as Sturgis-related.

Hoard, who said motorcycle riding is “kind of in my blood,” was mostly avoiding crowds but kept her annual tradition of going to Sturgis and attended a concert there, viewing it as safe because she sat outdoors. She started feeling sick a week afterward and went to the hospital after waking up one morning feeling like “death had crawled in the bed with me.”

“I was crying because I was like, ‘Oh, my God, I hope this isn’t corona,’” she said. “And it ended up being corona.”

‘It ain’t worth it’

The day Cervantes sat up from the couch and asked Balcom to take him to the emergency room, doctors put him on oxygen. He had been worried about the tightness in his chest, but he hadn’t grasped how bad it was. Only when he was being hooked up to the oxygen machine did he realize he hadn’t said goodbye to his children.

“I was just laying there thinking, ‘This could be it. This could be it,’” Cervantes said. “And, am I going to get another chance?”

He spent eight days in the hospital before being discharged Sept. 4. He was still sick when he left, but the doctors said he could recuperate at home. Walking across the hospital parking lot, though, he was so winded he had to take a moment to sit down.

Balcom, whose case was mild, cried in the car, relieved he was coming home. She never said “I told you so,” or got angry with him. She was upset, though, when she found out Cervantes’s case wasn’t included in covid-19 tallies linked to Sturgis.

“If we had an accurate representation of what’s going on, then people might say, ‘Maybe it’s not a good idea to go to the concert or go to the gathering,'” she said. “Everyone is just muddling through this because no one knows what the hell is going on.”

Cervantes now looks at things differently. Watching football, he worried how many of the thousands of fans admitted to a recent Kansas City Chiefs game might become infected, even as he noticed they sat apart. He once put on a mask to humor Balcom; now he says he has to resist the urge to yell at strangers to wear them.

After weeks of missed work, his stint in the hospital and a return visit to the ER over a blood clot concern, he’s come to deeply regret his decision.

“I was naive,” he said. “I was dumb, you know? I shouldn’t have went. I did; I can’t change that, so I just got to move forward. But sitting here just the past few days, that’s all I keep thinking about. I’m like, Jesus, look at the hell I’m going through, the hell I put everybody through. It ain’t worth it. It wasn’t. It really wasn’t.”

Jacqueline Dupree contributed to this report.

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9 People Who Attended Trump Minnesota Rally Test Positive For COVID

Trump’s most recent rally in Minnesota has resulted in at least nine of the attendees testing positive for the coronavirus.

The Minnesota Department of Health reported:

We now know that Trump had the coronavirus when he went to Minnesota and held a post-debate rally. The outbreak at the White House and in the Republican caucus of the US Senate is deservedly getting a lot of attention, but Donald Trump also caused COVID outbreaks in communities with his reckless and irresponsible rallies.

Trump is itching to start doing rallies again in places like Florida and Pennsylvania, but his rallies make people sick. The White House is still refusing to tell the American people when Trump’s last coronavirus test occurred.

Donald Trump could still be contagious right now. The fact that his first event back is going to be at a White House that so infected with COVID that it is unsafe for journalists to work there is not reassuring.

Trump rallies don’t just bring a sitting president who seeking a second term. They also bring Trump’s running mate, COVID-19.

For more discussion about this story join our Rachel Maddow and MSNBC group.

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Trump Aides Worried Rally Crowd Would Cheer If He Announced Ruther Bader Ginsburg’s Death

Donald Trump wasn’t told about the death of Ruth Bader Ginsburg before speaking at a rally on Friday because aides worried how the crowd would react to the news.

The liberal Supreme Court justice’s death was announced as the President took to the stage in Bemidji, Minnesota but his team opted not to inform him because they were concerned that crowd would cheer.

A new report in The New York Times makes the extraordinary claim and suggests at least some on Trump’s team are still concerned about optics.

When news broke on Friday that Justice Ruth Bader Ginsburg had died, President Trump was just five minutes into a campaign rally in Minnesota and aides opted not to pass word to him onstage,” the NYT‘s Peter Baker reported on Tuesday.

“If he announced the death of the liberal justice from the lectern, they feared the crowd would cheer.”

However, some of those in the crowd did hear the news about Ginsburg’s passing and when Trump started criticizing the Supreme Court in broad terms, some of his supporters tried to tell him about it.

“That’s why the Supreme Court is so important, the next president will get one, two, three, or four justices,” Trump said.

I had two. Many presidents have had none. They’ve had none. Because they’re there for a long time.”

Some people in the crowd tried shouting the news to the President but to no avail.

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