Amid rising anxiety about the COVID-19 pandemic, a stock market that has gotten used to a lot of human anguish continues to find a way to rise.

Encouraging signs on the vaccine front, flattening case counts in hard-hit states, perceptions that odds are falling for another nationwide shutdown, and death rates that -- while still horrific -- are below levels in the spring are all being cited by equity traders. The backdrop is three straight weeks of gains that have nudged the S&P 500 above its level at the start of the year.

“All of us have come to learn that this virus is with us and it’s not going away anytime soon -- we’re learning how to live with it,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management, who notes fatalities aren’t rising as fast as new cases. “As these health scares continue, there are re-outbreaks but it doesn’t cause the same damage to the equity markets.”

Death Rates

Nobody in the market downplays the virus’s human toll. In the U.S., more than 140,000 coronavirus deaths have been confirmed and the University of Washington’s Institute for Health Metrics and Evaluation projects the count will rise above 224,000 by November. Fatalities will continue to climb in the coming weeks, says Evercore ISI’s Dennis DeBusschere. But as harrowing as the numbers are, if they peak at around 1,000 a day in early August, traders may be able to focus on prospects that “the economic rebound continues and vaccine development remains on track,” he wrote.

Sunbelt-State Trends

A lot of attention has been focused on daily fatality rates across Sunbelt states, which investors and economists point out aren’t close to comparative measures from the northeast in the spring. For example, Florida reported an average 106 new daily deaths in the seven days through Sunday -- a record for the state. However, New York faced single-day death tolls above 1,000 in April, with the 7-day average peaking above 950.

Over the weekend, Florida representative Donna Shalala said the state’s Covid-19 outbreak is “totally out of control” in an interview with ABC’s “This Week.”

“The data suggest otherwise,” Chris Low, chief economist at FHN Financial, wrote in an email Monday. “It’s bad, but nowhere near New-York-in-April bad.” Across the U.S., the average daily rate of new fatalities in the seven days through Sunday stood above 760 -- the highest since July 1 but roughly a third of the peak above 2,000 seen in April.

Also over the weekend, data showed that daily cases in Florida, California, Arizona and Texas seem to be rolling over, Fundstrat Global Advisors’s Tom Lee, who’s dubbed the group “F-CAT.” A spike in Texas cases reported on Friday was due to a backlog and distorted the numbers. “Fortunately, the surge seen in F-CAT seems to be slowing,” he wrote Monday.

Likelihood of Another Shutdown

Key is the idea, lodged deep in investor minds, that chances of another lockdown are slim. The Trump administration has little appetite for shutting down the nation again, says Yousef Abbasi, global market strategist at StoneX. President Donald Trump is looking for ways to reopen schools and keep the economy open as the election nears.

“The federal government is not going to mandate a shutdown again,” said Abbasi. “The indications we have gotten from the president, from Larry Kudlow, from his advisers is full steam ahead. Whether it’s responsible or ignorant is a totally different argument, but the federal government has indicated that they would like to continue on the path of reopening.”

To be sure, reopenings are on pause or have been reversed in over 80% of the country, according to Goldman Sachs. And many enclaves seeing their case counts increase haven’t ruled out a second lockdown: Los Angeles Mayor Eric Garcetti said the city, facing a renewed onslaught of the virus, may be “on the brink” of new restrictions and that another stay-at-home order was an option.

However, if progress was made and cities and states were able to continue the reopening process, that could add fuel to the rotation seen last week -- with tech trading sideways and value stocks experiencing a “significant rally,” according to Ed Keon, chief investment strategist at QMA.

“For the market to go higher, you need to see some progress against the virus in hot spots like in Florida,” Keon said by phone. “For a lot of the value and economically sensitive sectors, you’re not going to really see consistent outperformance unless you get greater progress on having a sustainable reopening of the economy.”