COVID-19 Update – Growth Rates Slowing, But Daily New Cases Sticky (4/8/2020)

“A cold coming we had of it,
Just the worst time of the year
For a journey, and such a long journey.”
- T.S. Eliot, “Journey of the Magi”

Key Takeaways

• The U.S. currently has 399,979 cases of COVID-19, which is up 8.4% from our note yesterday.

• Globally we grew 6.3% day-over-day and now have 1,450,343 cases.

• We continue to get very varied approaches around the world of approaching the pandemic. Singapore has banned all public and private gatherings until May 4^th, despite having only 1,481 cases and six deaths.  Meanwhile in China, the lockdown was lifted in Wuhan.

• Emerging markets may very well be where this ends in an ugly way.  As one of our readers flagged to us, the reported deaths to reported cases in these areas tends to be high, which implies the infected population is much higher.

U.S. Situation

We are now in the plateau stage in the U.S. wherein daily growth rates are declining, but daily new cases are still near all-time highs. If the social distancing and shutdowns have been sufficient, we should start to see daily new cases decline incrementally through next week.

The U.S. has performed 2,079,943 tests, 395,784 positives (19.0%) and 12,770 deaths (3.2% of positives).  Positive test rate continues to tick higher in the U.S.

We aren’t ready to make too much of this just yet, but NYC cases increased again this morning.  While still below the high set on April 4^th, it was the second highest number of new cases we’ve seen in NYC.  (Just a side note, a very small pick-up in new cases in Japan was a leading indicator for an eventual shutdown of half the country.)

All of the hardest hit states are showing slowing 4-day rolling growth rates, with the exception of Georgia.  Interestingly, Georgia is the only state where the Governor reversed restrictions set by local officials and re-opened beaches, etc.

European Situation

New daily COVID-19 cases in Europe remain well below their peak, but added 32,826 in the last 24 hours.   Since March 26^th, Europe has basically been in the range of 30 to 40,000 new cases per day.

Europe will likely provide a decent guide for when the U.S. plateau of daily new cases starts to decline.  While U.S. shutdowns have certainly had their intended impact in slowing infection growth, we are concerned that the U.S. has been less stringent.  This is revealed in the Google mobility data we highlighted yesterday:

• U.S. mobility to retail and recreation -47% from baseline, -51% to transit stations, and -38% to workplaces
• France mobility to retail and recreation -88%, to transit stations -87%, and to work places -56%
• Italy is -94%, -87%, and -63% respectively
• Spain -94%, -88%, and -64% respectively

Global Situation

In as much as the growth rate is slowing, global daily new cases remain very high globally.  The chart below looks at global daily new cases going back a month. (Note: the spike on April 4^th was France adding patients in nursing homes to its totals.)

While the plateau is evident, this has occurred after close to a month of basically shutting down the global economy.  Subject to public health officials dramatically changing their views of the seriousness of this disease, it’s difficult, based on the numbers, to see the global economy broadly opening any time soon.

The emerging markets may well be where this all ends in a bad way.  Currently, that’s where we are seeing the highest growth rates, lowest level of testing, and highest deaths per case count

• Brazil 14,034 cases, +1,851 new, 686 deaths, tests per million people 258
• India 5,351 cases, 573 new cases, 160 deaths, 102 test per million people
• Mexico, 2,439 cases, 296 new cases, 125 deaths , 159 test per million people
• Algeria (these numbers are crazy), 1,468 cases, +45 new, 193 deaths and 77 tests per million people
• Big takeaway is that they are literally doing no testing. The U.S. which is a laggard has performed 6,271 tests per million people (40x that of Mexico!)

The reality is that these numbers are all grossly understated. We would point you to this article about Guayaquil in Ecuador, where they have run out of coffins.

Rightfully, the credit default swaps in many emerging markets are pricing in some serious economic risk going forward.  The chart below looks at Brazilian CDS over the last year.