There’s so much noise, but the virus is the virus, Real Vision CEO Raoul Pal told Ash Bennington during today’s Daily Briefing.

Pal argued that it doesn’t matter what we think about it politically and there’s no sense in debating whether governments are reacting appropriately; our job in markets is to deal with the reality at hand and figure out what it will do to economic growth.

In the U.S., we’re seeing more restrictions coming back in states that have surging virus infections like Texas and Florida. As a result, mobility and sales in those areas have come off their peaks. Pal pointed out that the same thing is also happening in New York and said this is purely due to a shift in human behavior.

“People are fearful and behavior drives economic impact,” he said. “We’re seeing a definitive slowdown. It’s early but it is happening.”

Pal said that the markets and the narrative are not prepared for the probable rise in death rates that will happen in the near future and that he thinks Europe has made a big mistake in opening up again for tourism. He thinks Europe will have another round of virus growth that will play its way into the data come September.

Overall, he’s not optimistic about the economic recovery. With the U.S., Europe, and other areas experiencing such a dramatic a resurgence, the V-shape recovery idea is dead, he said.

Equity markets may be disconnected from the current reality of trouble on the horizon, but Pal said the bond market has been giving us signals. Yields started falling in the U.S. and the UK went to negative 5-year bonds, the lowest in history.

The other place Pal said to look for signals is the banks and large, indebted companies, which both look bad. He said there’s something under the surface that is now coming to the forefront and it may be a signal that the solvency event he has long predicted is beginning to happen.