• Navigate This Market Turbulence: All Hedgeye Research → 3 Months 66% Off

    Preserve. Protect. Grow. Former hedge fund manager and CEO Keith McCullough has successfully navigated the Dot Com Bust, Great Financial Crisis and Crash of 2020. Get 66% off the smartest investing insights money can buy.

Editor's Note: This is a complimentary research note published by Director of Research Daryl Jones on April 3rd. CLICK HERE to get daily COVID-19 analysis and alerts from our research team and access our related webcasts.

“Nothing is so painful to the human mind as a great and sudden change.”
- Mary Shelley, “Frankenstein”

KEY TAKEAWAYS

  • U.S. Covid-19 case count is now at 245,646 – up just over 13% day-over-day. The trend of lower growth continues
  • Global growth also appears to be on a sustained new lower path of growth. From our note yesterday, cases are up about 9% at over 1,000,000+
  • While daily new cases are still high in Europe, the growth rate has definitively slowed especially in the hardest hit regions
  • India continues to concern us.  The number they are reporting aren’t terrible, but the growth rate is exponential. The country has the characteristics (population density and more limited healthcare system) to become the new global epicenter

COVID-19 Update – New Lower Growth Path Sustains Globally and in the U.S. (4/3/2020) - 02.26.2020 black swan cartoon

U.S. SITUATION

The U.S. has now completed 1,267,658 tests, 239,009 positives (18.8% positive test), 32,649 hospitalizations (13.6% hospitalizations on positives), and has 5,784 deaths (2.4% on total positives)

Yesterday, the U.S. added approximately 28,000 new COVID-19 cases, which was a new high. A week ago the same number was 16,000.  We’d expect this to be pushing ~40,000 new daily cases by the end of next week

The chart below shows daily new cases, daily new tests and rolling positive test rate in the U.S.  We continue to have concerns that new cases are outpacing new testing. As a result, the overall positive test rate continues higher in the U.S.

COVID-19 Update – New Lower Growth Path Sustains Globally and in the U.S. (4/3/2020) - covid.4.3.1

The data reporting from NYC and New York has been a bit challenging to analyze due to some delays, but the next two weeks is likely to see a surge of daily cases, new fatalities (lagging) and hospitalizations. New York state now has more than 100,000 cases and comprises about 38% of national cases and hit a new daily high of 10,000+ cases yesterday

New York still seems to be grossly under testing across the state and in recent days more than 50% of tests have been positive!

European situation

Slower daily growth rates in Europe after stringent lockdowns are certainly a positive, but the heat map below from the Financial Times highlights the other reality of lingering high daily new cases (red denotes those areas adding 1,000+ new cases daily).

COVID-19 Update – New Lower Growth Path Sustains Globally and in the U.S. (4/3/2020) - covid.4.3.2

To narrow in a bit on Italy, the government implemented a national quarantine on March 9th but daily new cases remain very high.  To some extent, we think this likely foreshadows the path in the U.S. as growth rate comes down, but new daily cases stay very high suggesting lengthy shutdowns.

COVID-19 Update – New Lower Growth Path Sustains Globally and in the U.S. (4/3/2020) - covid.4.3.3

Global Situation

In the chart below, we again look at the daily growth rate globally.  Clearly, there is a new lower trend

    • The trailing 5-day average daily growth is 8.9%, while the prior 5-day period was 11.8%

COVID-19 Update – New Lower Growth Path Sustains Globally and in the U.S. (4/3/2020) - covid.4.3.4

The caveat to a lower global growth rate is that we added another record of new cases yesterday at just over 80,000.  It’s likely that by early next week, we are adding more global cases per day than total “reported” Chinese cases (not that we trust their numbers, of course)

As noted at the beginning, India is the country that most worries us at the moment as cases are currently doubling about every two days.  This quote from a New Yorker article on April 1st summarizes the situation as we see it:

“Last week, Indian Prime Minister Narendra Modi ordered a three-week lockdown of the country, telling citizens that they were not to leave their homes, because of the coronavirus pandemic. The scope of this order is hard to comprehend: India is a country of more than a billion people; it has extreme poverty in many areas; and many of its cities, such as Mumbai and Kolkata, are extraordinarily dense. Since people who live in India often travel between different states for work, the lockdown also left hundreds of thousands of migrant workers stranded; many of them are trying to return home on food.”

The full article is here 

Sadly, India is likely set up for a very tragic outcome from COVID-19