COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days

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POINT #1: Encouraging that NYC and NY State peak of crisis may be within 7-10 days…
The latest NYC update (from this evening) is quite encouraging.  Manhattan is actually showing a slight decrease in new cases to 376, even as statewide testing has increased.  There is some data that shows “test by date of specimen capture” but it seems lumpy.  But on a preliminary basis, it reinforces that the “peak burning crisis” is likely in the rearview mirror for NYC.  The second half of the chart below also shows that Queens, while still flaring, is not surging to new highs.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days



Cases in NYC overall were exactly 4,000 for 4/2/2020…
If you examine the chart below, you can see 4,000 is about the same level for the past 9 days.  This is really quite a linear outcome.  Now, someone might suggest that testing capacity is capped in NYC, so we only see 4,000 or so positives.  Or they are only testing at the hospitals.

– if this was the case, we can see if there is a lurking “exponential rise” in hospitalizations or even deaths.  Because these would not be constricted by testing capacity.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days


NYC daily deaths and daily hospitalizations are also relatively stable… but the models used by the Governor point to a peak in these next week…
The tables below are both hospitalizations (top one) and daily deaths.  Daily hospitalizations are hovering around 800-1,000 and this level has been constant since 3/28/2020.  Think about it this way, if there was a testing capacity constraint, this would not prevent someone who was getting much sicker, from seeking hospitalization.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days



Similarly, daily deaths are in the same range of 100-200.  Now this is clearly an alarming level of people dying.  New York City typically sees 450 deaths per day, so 100-200 from COVID-19 is a serious increase.  What we don’t know is how many of these COVID-19 deaths are coded as COVID-19, but another factor was behind it.  We don’t need to make that assumption for thinking about the peak of the COVID-19 crisis.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days




Encouraging broader picture for NY State…  peak in crisis (deaths) may be approachings soon…
But this wraps into a more encouraging picture for the state of NY.  Governor Cuomo today in his press conference alluded to the fact that the models his staff is provided with shows the peak of the crisis ranging from 7 days –> 14 days –> 30 days.  A huge range and he himself said he believes the sooner scenario seems to be taking shape.

– the daily case count for NY is also starting to look linear (flattening) and that is a good thing. 

– The IHME model below is suggesting N state will be peaking in daily deaths within a week.  This model has been pretty good.  We used the wayback machine to see what it was projecting for 4/2/2020, and it was not far off.  This is surprising.  The link for this website is: https://covid19.healthdata.org/projections


COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days





POINT #2: NY state had the worst outbreak, and 8 states >50% of US GDP.  These are the key states to watch…
We alluded to this yesterday.  But the 50 states are not all equal contributors to GDP (electoral votes tell us that too) and as shown, 8 states are 50% of US GDP and another 10 are 25%.  So 18 states make up 75% of GDP.

– Because NY state was the first to require a complete shutdown, this remains the leading edge.  But a peak in NY leads to peaks in other states, and pretty soon, we have the endgame in sight.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days




The other top 8 states are outperforming NY, with the exception of NJ….
We plotted the top 8 states on the chart below.  To “same size” this analysis, we look at cases per 1 million residents.  And the time series starts when cases = 100 in a state.

– New York exploded as the case count reached >4,700 per 1 million pops.  If this figure hit 10,000, that would imply 1% of the state is infected.  

– As it is, 1 in 200 residents of NY State has COVID-19.  That is very high.

New Jersey seems to be faring way worse…
For the same amount of days, NJ has seen even faster growth in cases.  This is troubling.  But perhaps not a surprise, given the vicinity to NY.

– But the other top 8 states are faring way better.  See how their curves are flattening even with the passage of time.  Hopefully, this is telling us social distancing is working.

– Even the next 10 states are outperforming NY (25% of GDP) with the exception of Michigan.  

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days




Louisiana is the next hotspot, because it is 10% of US new cases and only 1% of the population…
We did not include Louisiana here, but that state is seeing a rapid outbreak.  There are some who have suggested that Mardi Gras was the catalyst for the spread.  And thus, we are seeing this outbreak because of that event.

Looking below, Louisiana is accounting for 10% of all new cases of COVID-19 but has only 1% of the US population.  So it is 10X as bad…

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days



POINT #3: Investors need to start thinking about when markets will start to see the glass “half-full”
We all know there will be horrifically bad economic data in the coming weeks and months.  But we need to be mindful that markets will eventually stop responding to bad news.  In fact, in our comments yesterday, we noted that in 2000-2003 bear market and 2007-2009 bear market, equities bottomed BEFORE jobless claims peaked.

– that is simply a reminder, that even if one thinks the crisis extends into late 2020, the market will be responding to the second derivative (i think that is the right term).

– today’s equity market reaction is a good example.  We saw 6 million initial claims, which is 2X from the prior week, yet, stocks took it in stride.

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days




So I will close with a reminder of why markets could start to see the state of the crisis as “half-full”
This is by no means, a complete list.  But we are providing this just as perspective.  In fact, our global portfolio strategist, Brian Rauscher, remains constructive short-term and even boldly suggests last week’s low on 3/23/2020 will not be revisited.

– That is a non-consensus view.  And I really want him to be right.

CHECKLIST FOR WHY THINGS COULD BE HALF-FULL…

•New York, bleeding edge, outperforming baseline = faster return

•Other states = 50% GDP, outperforming NY State

•Treatment = positive developments, accelerating reduction in fear

•Policy steps have been ‘lightning fast’ = reduce downside risk

•US equities bottom on jobless claims peak, not employment bottom

•Regardless of economic contour, L-, U-, I- or V-shaped, equity recoveries are V-shaped

COVID-19 UPDATE, NYC and NY state tracking to inflection next week, including 'peak deaths' within next 7-10 days

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