• 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 22th. CLICK HERE to get COVID-19 analysis and alerts from our research team and access our related webcasts.

“I had nothing to offer anybody except my own confusion.”
- Jack Kerouac

KEY TAKEAWAYS

  • Globally COVID-19 daily new cases continue to go to new highs on the back of more testing and wider community spread.  On June 19th we had 181,000 new cases globally, which was well above trend and partially a function of the timing of reporting in Brazil (chart below)
  • If you follow the news at all, then you will know that we are having resurgence of sorts in the U.S.  It’s not necessarily all bad or dire, but there is evidence of increased community spread and higher positive testing in some states (ideally, we want more testing and lower positive test rates). Currently, 31 states have a R0 north of 1
  • Broadly the emerging markets continue to see higher daily cases on, largely, inadequate testing levels.  India, as an example, is now 4th in the world in cases and not seeing a real flattening in daily cases
  • Most of developed Asia and Western Europe continues to be in very good shape.  Unfortunately, on many metrics the U.S. is really in much worse shape

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - 01.29.2020 bull bear virus cartoon

U.S. Situation

The U.S. currently has 2.27MM positive cases, 27.1MM tests have been performed (8.4% positive), and has had 113K fatalities (5.0% fatality rate on positive tests)

Currently, there are 31 states with a R0 over 1 according to https://rt.live/. This troughed at a low in the single digits

In the chart below, we look at daily COVID19 test in the U.S. versus positive test rate.  As you can see, the ramping of tests (along with social distancing) led to a declining positive test rate.  We appear to be at a marginally negative infection as the 7-day moving average of positive test rates is starting to move higher.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee1

We will dig into a few specific states below, but we wanted to also highlight a new shift to higher daily new cases excluding NY, which was obviously the epicenter in the U.S. for a number of months.  As the chart shows, we haven’t really seen a meaningful decline in the U.S. and are starting to see a pick-up excluding NY.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee2

The new epicenter in the U.S. is largely centered on 4 states – CA, TX, FL, and NC – which in recent days have been between 40 and 50% of daily new cases in the U.S.  Below we highlight a chart of Florida new cases and, as you can see, Florida is on a new and much higher trajectory.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee3

To some extent, of course, it is inevitable to see a resurgence of cases given that the U.S. has broadly re-opened and the dramatic increase in testing.  The concern of course becomes hospitalizations and overwhelming the hospital system.  In focusing on the four states mentioned above, we find the following:

    • Arizona – Positive test rate has been north of 20% in the last week and COVID hospitalizations are at all-time highs;
    • Florida – Positive test rate is well of its lows of single digits and now trending in the 12% range.  Hospitalizations are off their lows, but not at new highs (the state has also reclassified what it considers a COVID hospitalization).
    • North Carolina – Positive test rate is trending back into the low double digits and hospitalizations are at new highs; and
    • California – Hospitalizations have hit a new COVID high. 

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee4

Europe and Asia

The slight flare up in Beijing seems to be largely under control after strict measures were put in place by the government. In the last 24 hours, only 22 new cases were discovered in Beijing.

Not much to report from the rest of Asia as cases are, by and large, under control.  The starkly different paths of Asia and the West can be partially attributable to a culture of wearing masks as the chart below highlights.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee5

Across Europe most countries are adding in the range of 200 – 300 new cases per day, with the exception if U.K. which is still near 1,000.  Despite re-opening on similar time frames to the U.S., there has been no meaningful uptick across Europe

Rest of the World

The emerging markets continue to get incremental worse.  Brazil remains on the forefront of that trend and printed some very high daily new case numbers in the last five days, which appear to be related to timing.  Nonetheless, the trend is up and to the right for Brazil.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee6

We’ve written a bit about Mexico, which has had very high death rates and very limited testing.  Mexico is likely to continue to become more of a focus given its proximity to several U.S. states that are seeing a resurgence.  Below we’ve highlighted the Mexican morbidity rate on positive COVID-19 cases, which continues to trend higher.

COVID-19 Update – Global Cases Going Higher and U.S. Seeing an Increase (6/22/20) - ee7

The reality of Brazil, Mexico and many emerging markets it that tests rate are extremely low, so we have no true sense for the scale of the pandemic.  As a frame of reference, we compared some of the more significant hotspots to the U.S.

    • U.S. 86.9K tests per 1MM pop
    • Brazil 11.4K
    • India 5.0K
    • Pakistan 4.93K
    • Bangladesh 3.8K
    • Mexico 3.7K