COVID-19 UPDATE. As focus moves beyond NYC, looking at counties worse. Verishop.com highlights on-line shopping soaring, especially for home goods.

The incoming data for Tuesday (4/7/2020) reinforces the constellation of factors pointing to NY/NYC peaking in overall COVID-19 case growth (Cuomo even noted intubations down again).  But even as cases peak, death will continue to rise.  Deaths stem from cases that have become serious enough to require intubations, and once a patient is intubated, the mortality is quite high.  And there are also some deaths that result from the rapid deterioration of a patient.  Just as cases rise for some time after “strict social distance measures” are implemented (due to incubation period plus non-compliance), deaths will still rise for some time.

– Based on the 19 nations below, we can see the death will rise for -2 to +12 days, with a median of 4 days.  Meaning, we should see a peak in NY state deaths something within the next few weeks.

– Similarly, this means we should not necessarily assume a ‘relapse’ or ‘breakdown’ in the healthcare system is taking place if deaths rise from here.

NYC reported a big jump in hospitalizations this evening…
We will discuss NYC in greater detail on Point #2 (below below) but what was noteworthy today was a sizable jump in reported hospitalizations.  The daily increase was 3,844 which is higher than any prior level and looking at the boroughs, 

– the jump is widespread across all 5 boroughs.  Bronx 4X.  Brooklyn 3X.  Manhattan 5X.  Queens 3X.  Staten Island down.
– this bears watching.  It is not clear if this is simply a reporting lag (Sunday + Monday’s lag) or if hospitalizations are simply exploding.

POINT #1:  Tracking the outbreak beyond NYC.  US counties with the highest case/ 1mm residents.
Our data scientist (tireless Ken) compiled county-level data, so we could see COVID-19 penetration across counties and also mortality rates.  In coming updates, we will also find ways to highlight case growth by county in a digestible form.

The US aggregate cases/1mm residents is 1,183 = 1 in 845 residents.   

– NYC was the highest for some time but now only ranks #12.  There are 11 other counties in the US with greater cases per 1mm residents.
– As it is, nearly 1 in 108 residents of NYC has COVID-19 (wow). 
– Rockland County is the highest in the country and is 1 in 54 residents (18,386/1mm) and is tied with Blaine, Idaho.
– For NY-area residents, Westchester is worse than NYC with 14,774/1mm, or 1 in 68 residents.
– Fairfield County, CT is also high (#36) with 4,384/1mm or 1 in 228 residents.

If anything, the shows why anyone who is not infected should heavily practice social distance measures.  If only 1 of 10 cases is diagnosed, this means 1 in 7 Westchester residents tested positive. 

Looking at counties with the case fatality rate (measured deaths/ cases)…
The calculated CFR, or mortality rate, is 3.2% for the US.  This figure is due to the higher mortality for older adults and does not mean a 1 in 33 chance of death for anyone who has COVID-19. But we listed the 40 counties with the highest CFR (case fatality rate).

– Topping this list is Miami, OH.  This is a college town (not any bearing on death rates) with 11.9% of COVID-19 cases leading to death. 
– Close behind is Tolland, CT at 11.7%.  Tolland is a tiny county just east of Hartford, CT. 
– Of larger counties (>1mm), this highest is King County, WA, which was the known outbreak that started in Kirkland.
– NYC ranks 29th on this list, with a 5.2% fatality rate.  So COVID-19 has proven quite deadly in NYC. 

The NYC death rates are driven by high CFR for the two reported cohorts:  75-plus (20.1%) and ages 65-74 (9.3%).  Still, even 45-64 sees a CFR of 3.2% currently.  

– To an extent, NYC probably overstates CFR, given most residents exhibiting signs of COVID-19 are urged to stay at home (self-quarantine) and discouraged from being tested.  Hence, if there is any multiple of unknown cases vs reported, these CFR will fall.

POINT #2: NYC remains range-bound and that is beneficial, as the focus is now shifting to the rest of the country.
NYC cases rose on the 4/7/2020 evening update to 5,825 but we are used to the ‘jumpiness’ and this is not a cause for alarm, yet.  And as the hospitalization data above shows, there is something peculiar of the reported data today anyways.

Across the boroughs, Manhattan is stable but the jump seems to be in Brooklyn (second column, dark grey) and Queens (which has been elevated).  There is nothing that really argues against the view that NYC is probably peaking.

POINT #3: The US overall trend is possibly pointing to the ‘apex’ in cases soon…
The good news is that despite jumps in new cases reported across many states, the number of new cases reported on 4/7/2020 at 31,263 is below the 33,767 posted last week on 4/4/2020.  

– This is some cause for optimism.  Granted, social distance measures were put in place in a state-by-state basis, but the country broadly has been under strict social distance for some time.  Thus, any surge in cases would be driven by outbreaks in additional states.
– None seem to be seeing a massive outbreak at the NYC/NY state level.  And thus, this is a good sign.

In other words, if the case number jumps this week >34,000, it is likely due to another large state seeing a surge.  But that is not the case then at the moment.

State ‘diffusion’ chart shows more states see daily cases falling <10%/day… 
The state diffusion chart (putting state case growth into buckets) shows the gray and the green columns higher.
– 34 (+2) states have case growth <10% (but >5%)
– 8 states (+2) daily case growth <5%

Thus, 4 states moved into the ‘2X >7 days’ camp over the past day.  This is positive progress.

And if you would like to see the daily case increase by state (sorted highest to lowest), NY state is slowing down.  NJ, which was bad, is slowing down.  But other states below are rising.

STRATEGY: Thinking about 3 changes in the US post-pandemic.  Verishop data highlights de-urbanization is real.
There will obviously be many changes to the world post-pandemic.  Unknowns remains how quickly we want to re-engage.  Will we be fearful of a cough and will social distance be permanent? We doubt it but a vaccine or a cure will go a long way to end fear.

And while many changes will happen, the 3 most obvious to us:
– US companies will on-shore and shorten supply chains –> Asset heavy US (bullish value)
– More US workers will ‘work from home’ / telecommute, changing nature of office space (go long home office?)
– Suburban migration as ‘urban density’ = pandemic risk –> bullish housing and housing-related (inflation positive too).

Verishop.com, a newer shopping platform for fashion, brands, decor, wellness, has a pretty interesting post about consumer shopping habits.  This company was founded by Imran Khan.  I worked with him at JPMorgan when he was the internet analyst extraordinaire.  He became an internet banker and then Chief Strategy Officer at Snapchat.  So Imran knows this space better than Al Gore (self-proclaimed inventor of the internet).

In the company’s latest blog post (Verishop medium post), the note some interesting trends in consumer habits, both on categories of purchase as well as age group engagement. Basically, during the stay at home, there are tons of home-related/nesting purchases.  Cooking, decorating, etc.

– this reinforces our view that millennials post-pandemic, likely want more distance between their neighbors.  This should be positive for suburbs, less positive for urban living.

This is merely our thinking. We are not dogmatic and it could easily be that cities remain the most attractive.  But the Verishop.com trends do suggest suburbs might be the big winners.


from blog post…

Be safe everyone and remember a safe distance is social distance.