by David Lieberman

Managing Partner, Portfolio Manager

Quick Summary

United States
• Case count over the weekend didn’t decline as much as forecast, although Sunday’s growth of cases of 25,000 was the lowest since March 31st. Case growth slowed to 3.4% yesterday down from 4.1% and 4.7% the prior two days.
• The slowing trend continues, although the slowdown has been more at a rate closer to Italy than China, and has almost stagnated in some states in the past week. Only 30 states out of 51 territories showing a slower rate of growth in the past 4 days vs. the prior 4 days. Four states had a growth rate of over 10% in the prior 4 days including ND, NE, WY, and OH. Nonetheless there is still a clear trend downward and it does not appear that overall progress is at risk of stalling.

United States
• Case count over the weekend didn’t decline as much as forecast, although Sunday’s growth of cases of 25,000 was the lowest since March 31st. Case growth slowed to 3.4% yesterday down from 4.1% and 4.7% the prior two days.
• The slowing trend continues, although the slowdown has been more at a rate closer to Italy than China, and has almost stagnated in some states in the past week. Only 30 states out of 51 territories showing a slower rate of growth in the past 4 days vs. the prior 4 days. Four states had a growth rate of over 10% in the prior 4 days including ND, NE, WY, and OH. Nonetheless there is still a clear trend downward and it does not appear that overall progress is at risk of

United States Forecast Summary
• Cases in the US have remained elevated a little longer than expected and this has pushed the timeline further back. Cases remained roughly flat in the US for almost 3 weeks. Also because the US is tracking more closely to Italy’s recovery than China’s the forecast several weeks into the future was also extended because Italy’s growth rate has declined more slowly. The CFR% is roughly in line with where it was prior to the weekend.
• The total case count forecast in the US has remained the same between 1,000,000-1,100,000 and a total number of deaths ranging from 75,000-85,000.
• When might we be under 1,000 cases nationally per day? This estimate has been pushed back as the US tracks more closely to Italy than China. The new estimate is the second half of May with May 19th as the estimated date, now 11 days later than the estimate a week ago.
International
• Case count growth continues to slow. Globally case count growth grew 3.3% down from 3.6% and 3.9% the two days prior.
• Nearly all countries in the world are seeing a broad based slowdown.

Percent of Tests Given That Yield a Positive Result by State
New Jersey continues to have the highest percentage of positive test results. Testing in the state has not increased in about a month and has held steady with around 7,000 tests given per day. At some point the daily positive rate will fall but it remains around 50%. Not coincidentally the number of positive cases in NJ has averaged nearly 3,500 for the past 19 days.

Nationally, testing has also remained relatively flat but the positive percentage has now fallen to 16% as of yesterday.

Source: Covid Project

Second Wave
Evidence for a second wave in Europe, the US, and Asia is likely to take weeks and possibly longer. If a closed economy slowly opens by 20% in the first week of reopening then that impact will be relatively small and may not be evident for a few weeks because of the incubation period, time to develop material symptoms, and time to receive results from testing. Individual behavior is also likely to remain conservative. Just because some stores opening doesn’t mean that people behave as if things are back to normal. If movie theaters opened tomorrow very few people would go (we’ve seen this in Sweden, for example). So the real impact of an economy opening by 20% is likely to be much smaller and harder to measure.

There is no evidence of a second wave at this time. However some have pointed out that there’s a second wave in Japan and Singapore. Neither country had contained the virus so I hadn’t considered it a second wave, but they both had successfully kept case counts to modest levels for a month unlike most other countries.

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