• Investing Insights & Exclusive Offers → Get Our FREE “Market Brief”
    Sign-up for our free weekly newsletter. Get unparalleled investing insights and exclusive Summer Sale discounts on Hedgeye research.

    Disclaimer: By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy

Editor's Note: This is a complimentary research note published by Director of Research Daryl Jones on June 12th. CLICK HERE to get daily COVID-19 analysis and alerts from our research team and access our related webcasts.

"Just when I thought I was out, they pull me back in!"
- Michael Corleone, “The Godfather Part III”


  • We’ve taken a break from our COVID-19 updates because, like many of you, we were getting some COVID fatigue. That said, the story is getting increasingly important to follow both domestically and abroad.
  • Globally we are now at 7.6MM cases globally. This is up about 2MM since our last report on 5/26.  On the positive, the total active cases is smaller than the total recovered.  On the negative, as we’ll dig into below, daily new cases continue to hit new highs.
  • In the U.S, it is still mostly good news as the trend of daily new cases continues lower and testing continues to increase. The caveat is that there is sign of a resurgence in some States that opened earlier and R0 is now above 1 in fifteen states (it was nine in our last update).
  • Asia and Europe remain in very, very good shape.  Conversely, the emerging markets, led by Brazil, are an unmitigated disaster.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - 01.27.2020 coronavirus cartoon


U.S. daily new cases have been in the 19 – 25k general range for the last two weeks.  As the chart below highlights, the trend is moving lower but the plateau is a lot stickier and higher than we have seen in Europe.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC1

In part, of course, doing more tests will lead to more positive cases.  As the chart below shows, we are now doing more than 400,000 tests a day in the U.S. and the positive test rate is sub-5%. Obviously with the massive increase in testing, we are uncovering more asymptomatic cases.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC2

In aggregate, the U.S. has 2.09MM positive cases, has performed 23.1MM tests (9.1% positive test ratio), and has had 116,194 deaths (~5% on total positive cases)

If the positive side of the equation in the U.S. is more testing, lower positive test rates and a declining morbidity rate, then the negative side of the equation is clearly the community transmission is increasing in some areas.

    • Currently according to rt.live there are 15 states with a R0 above 1 – VT, SC, AZ, AK, UT, FL, AR, TX, OR, ND, WA, TN, NC, KY, AL.  This is the largest number since the re-opening.

Texas is one example of things getting incrementally worse.  The trend in daily new cases continues higher and active cases continue to hit new highs.  As the chart below shows, while the 7-day moving average is going lower in the U.S. as a whole, it is going higher in Texas.

    • Though Texas is not yet at a crisis moment, total hospitalizations in Houston are up week-over-week by 18%.  Interestingly this is coming on the back of lower testing volumes and a higher positive test rate. Some interesting data on Houston can be viewed here.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC3

The next few weeks are going to be very critical to watch across the U.S. as mobility is up meaningfully and the massive protests have the potential to be super spreader events.   Mobility across the board is up well off its lows.

    • Incidentally there also appears to be a resurgence in cases in states where a large percentage of the population regularly attend church.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC4

Emerging Markets

As we highlighted many weeks ago, the emerging markets were likely to get hit the hardest due to weak healthcare and limited testing 

Brazil, in particular, has been hit very hard and currently has the second most COVID-19 cases after the U.S. and continues to hit new daily highs in cases that exceed the peak in the U.S. on a population adjusted basis.

    • Interestingly the Brazilian stopped publishing COVID-19 until the courts ordered them to resume.

The most significant challenge in analyzing the epidemic in emerging markets is that testing has been very limited.  Therefore, the reported numbers likely grossly underestimate the infected population.

    • U.S. has performed 70.2K tests per million people and has a positive test rate of ~9.1%
    • Brazil has tested 6.4K people per million and has a positive test rate of 59%!
    • India has tested 3.9k people per million and has a positive test rate of 5.7% (a good number)
    • Mexico has tested 2.9K people per million and has a positive test rate of 32%)
    • Pakistan has tested 3.7k people per million and has positive test rate of 18%

In general, the harder hit emerging markets have tested at a rate 10 – 20x less than the U.S.

The map below, which can be found here, highlights the current global hotspots and where the math suggests cases are likely increasing.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC5

Europe and Asia

Despite garnering much of the early headlines, there is not a lot to report from either Asia or Europe as the pandemic is largely under control.

Across Western Europe daily new cases in the likes of Spain, Italy, France, Germany, etc number in the hundreds and the trajectory of improvement has far outpaced the U.S.

The lone exception in Western Europe is likely Sweden, which of course never really locked down and continues to see new highs in daily new cases. For comparative purposes, we’ve highlighted the charts for both Italy and Sweden below.

    • If we average the last 3 days of new cases and normalize on a population adjusted basis Sweden (1249) and Italy (288), then Sweden is currently adding 26x more cases than Italy.
    • Looked at another way, on a population adjusted basis Sweden is currently adding as many new cases as the U.S. was at her peak.

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC6

COVID-19 Update – Global Cases Continue to Hit New Highs (6/12/2020) - CC7

The other problem area in Europe is Russia, but on the margin things are improving in Russia. Assuming we believe the numbers, daily new cases continue to gradually decline and almost 1 in every 10 people has been tested in Russia.

Asia is looking very good across the board and all but eradicated the spread in China, Japan, and Korea.