Continuing volatility in markets reflects a reopening rally that has stalled, and the debate about where things are headed from here is focused largely on the rapid increase in virus cases, Ed Harrison said during today’s Real Vision Daily Briefing.

Harrison said that the U.S. is faring much worse than other countries both in our handling of the virus and in containing its spread and we’re seeing high frequency data that says the economic impact of that has already begun.

The enormity of this second wave of cases and the disruption it may cause has not been priced in, Harrison said, and with balance sheets under stress in the private sector we don’t need one more straw on the camel’s back. It remains to be seen whether a repricing will come as a crash or a slow grind downward.

Harrison said that a slow grind would be worse than a drop because it would be unlikely to provoke Fed intervention to mitigate the fallout.

As the market digests what kind of recovery is taking shape, Harrison thinks we could have more rotation bursts like the one that recently saw a move away from tech and into industrials and non-U.S. markets.

“We’re still rotating through to figure out what’s happening,” he said.