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It was just a few months ago when reports of rising coronavirus cases routinely sent stocks into atailspin. Not anymore.

Rather, it's as if investors have become inured to dailyCovid-19 count headlines. Take Monday, when the cumulative numberof total confirmed cases in the United States neared 3 million, yetthe S&P 500 rose for a fifth straight day, its longest winningstreak of the year. Tuesday, the president of Brazil tested positive forthe virus, and stocks barely budged.

As difficult as it may be to understand, especially with humanlives behind each and every statistic and businesses stillstruggling, some Wall Street strategists say there are logicalreasons for the disregard. Instead of rising case counts, tradersmoonlighting asepidemiologists are now focused on data including fatality ratesand hospitalizations that could force governments to lock down anewor pressure the economic recovery.

"Case count isn't necessarily a negative as long as those whoare catching it aren't susceptible to a really bad outcome," saidBob Phillips, managing principal at Spectrum Management Group. "Aslong as the trend of deaths stays down, I think investors can livewith the virus and with the expectation that we will get through itand we may have seen the worst of the damage."

1. Positivity Rates

According to Bespoke Investment Group's Paul Hickey, viruspositivity rates may be skewing higher due to a lack of testingover the holiday weekend. Consider that reported coronavirus testsare down 9 percent on a week-over-week basis, the biggest dropsince a 24 percent decline that happened around Memorial Day. It'slikely the Fourth of July holiday is at least partially to blamefor higher national positivity rates.

Independence Day is "driving tests down sharply, sendingpositive rates surging (to the highest rate nationally since theend of April) but having little impact on hospitalizations," Hickeywrote in a note. On Monday, hospitalization rates were lower on aweekly basis though still above 1,000. Hickey expects test countsand new cases to bounce back this week, sending the positivity ratelower. He added that deaths remain "quite low for now."

2. Low Fatality Rate

Ryan Detrick, senior market strategist for LPL Financial, hasbeen watching the growing gap between new cases and the fatalityrate. In a tweet Monday, henoted thatthe seven-day average of new Covid-19 cases in the U.S. hit anothernew high, while an equivalent measure of deaths from the virus hita new low.

"Aware cases are supposed to lead deaths, but it hasn't happenedyet, and this divergence is probably a big reason stocks are nearnew highs," Detrick said.

3. Double Counting

To Fundstrat Global Advisors' Tom Lee,there are a few events that could have a significant impact on themarkets. One is the development of a cure or vaccine. The other isthe possibility that recently hard-hit states like Florida,California, Arizona, and Texas (a group he's dubbed "F-CAT") couldsee cases diminish, marking the apex of the current U.S. wave.

Lee sees certain counties in each state acting as leadingindicators and estimates there's an 80 percent chance Texas isalready past its peak. Meanwhile, Florida has implemented adouble-counting methodology, meaning that a new case is talliedeach time a patient tests positive—even if that patient takesmultiple tests, he says.

Lee points out daily deaths remain in a downtrend. Though caseshave been surging across the U.S. for several weeks, subsequentspikes in nationwide hospitalizations and deaths have not followed."This is becoming a pattern, where the absence of 'bad' or evencatastrophic news is resulting in a general upwards drift inmarkets," Lee wrote in a note to clients.

— With assistance from ClaireBallentine.

From: ThinkAdvisor