COVID-19 UPDATE: NYC serological study suggest 13X > prevalence = 1.7mm asymptomatic NYC-ers (of 8.4mm residents). Changes calculus: Treatment > Testing > Vaccine
COVID-19 remains a global crisis and we realize that many people need to keep up with COVID-19 developments, particularly since we are moving into the more critical stage ("restart economy"), so feel free to share our commentary to anyone who has interest.
Several states today and yesterday reported somewhat meaningful increases in COVID-19 cases, including NY, NJ, and MA. But none of the governors, during their press briefings, seemed particularly concerned about this rise. In total, US daily cases jumped to 32,179 (+3,269, a pretty sizable jump) with 75% of that attributable to NY, NJ, MA. NY Gov Cuomo spent much of the time discussing the results of NY state serological study which found the prevalence of COVID-19 (based on antibodies) to be ~10X higher than previously thought and NYC with an estimated 21% of residents have been previously exposed (13X). Cases are rising but state leaders are not sounding incrementally alarmed and perhaps this is a sign that hospitalizations, intubations, and death are their new benchmarks.
But what we think is the most meaningful development today is that NY state study is now the 5th serological study that shows vastly higher COVID-19 prevalence. Why does this matter? We think it casts the pandemic in a very different light, with COVID-19 likely asymptomatic for 92%-98% of those infected and 2% requiring hospitalizations. If this is in fact correct, this means testing is far less important than treatment, and vaccines may be the least important. And with such high prevalence, the convalescent plasma may be the most promising, since the data suggests there are as many as 46 donors of plasma in NYC for every patient that is hospitalized. Way more availability of plasma.
As for markets, stocks managed a flat day on a mixed earnings picture, plus terrible economic data as 4.4 million jobless claims show the economic damage is broadening. But most investors are already aware that the economy is worsening. In fact, the bigger element of uncertainty at the moment is the pace at which the consumer will re-engage, particularly with the "social distance taboo" of restaurants, travel, and entertainment.
FYI, we quantify the consumer expenditures on these categories (see below) and it is ~$700 billion of the $8T consumer wallet and $14T of consumer PCE. The largest share of consumer wallet is housing + transportation + food = 66% (mostly at home food). So the social distance taboo is a relatively large 9% but if the US follows the path of China and these categories worth $700 billion see a 33% overall lower level (vs pre-pandemic), this represents a 3% overall hit to consumer expenditures.
In other words, once the economy is re-started, the "hole" that will need to be filled by that potential 33% drop is $240 billion, which is not a deep a hole as one imagined a month ago.
POINT #1: NYC serological study (early) points to 13X > prevalence compared to "confirmed" cases
One of the more notable developments today was NY Gov. Cuomo announcing the results of a serological study (antibody-based) of NY state. According to the NY study, 3,000 residents of the state were randomly tested (subjects found at grocery stores + shopping locations in 19 counties). We did not have access to the full report and are presenting the data as disclosed in his press briefing.
- The most surprising statistic is that Cuomo suggested at ~14% of NY state residents have already been exposed to COVID-19, which is 10X the "official" case count.
- For NYC, the estimate is >21% of NYC has COVID-19 antibodies and is 13X the official estimate.
- This is now the 5th fairly large scale serological study and the summary of the other 4 are shown below: Los Angeles County, Chelsea, MA, San Francisco, and Gengelt, Germany.
As we noted in an earlier FLASH, the conclusions for these studies is largely the same. The actual prevalence of COVID-19, based on antibodies is 13X to 50X to 80X greater than official tallies.
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