COVID-19 UPDATE: Trends in COVID-19 deaths good, but hospitalizations up 8%. India study 8% infected have R0 >8

Click HERE to access the FSInsight COVID-19 Daily Chartbook.

STRATEGY: America at a decision point as COVID-19 cases rise — worst policy decision is “doing nothing”
The worst thing for policymakers to do is nothing…
COVID-19 cases are rising again in the US.  This is not only confirmed by the sustained rise in cases across the US.  But as we discuss below, the fact that COVID-19 patients hospitalized is up 8% in the past two weeks.  The fact that cases are rising is not the real issue, in my view, it is really two orders of effect:

– first, will cases rise exponentially, ala IHME’s view of a deadly winter second wave?
– second, what actions should policymakers take?

As Teddy Roosevelt, the US 26th President, famously said:

In other words, we want to make sure US policy makers don’t do the “worst thing” which, I believe, is “doing nothing”.  I think it will be important for federal, state and local governments to take some mitigating actions.  I am not in favor of economic shutdowns, and even point to NYC as an example of how that will not help (NYC has been mostly shut, and cases are inching up).  Rather, it probably becomes an issue of making sure American’s take better individual action.  As Dr. Charles Murray of IHME stated, the more Americans lose fear, the more careless we get.

– At least NY/NYC finally rolled out a contact tracing app.  Better late than never?  It is October 1, and COVID-19 contact tracing apps and even the APIs have been around since May.

Source: NY Dept of Health


But if US cases do not rise exponentially, this is a real validation the US can manage COVID-19…
But equally important is the trajectory of cases in the next two weeks.  I don’t think it is a foregone conclusion that the US is going full “second wave.”  Europe has gone full on the second wave especially in France, Spain and the UK.  But Europe is what we need to watch, in a way:

– None of the 3 nations is really taking drastic measure (UK closed pubs).
– Mortality has not soared while cases soared = good
– Germany and Italy have hardly seen a rise

Source: Johns Hopkins and Fundstrat



Chances for passage of the stimulus package before election day dimming… 
It looks like the chance for a fiscal stimulus package before election day is dimming.  This is disappointing news on many levels.  Politics aside, with the economic restrictions in place, millions of Americans are facing a new wave of distress.  Our Policy Strategist, Tom Block, shares his thoughts below.  But basically, the gap is $600 billion, and that difference is enough to end progress.

If there were a chart to really explain the changes in traveler preferences, it might be this hotel Rev/PAR (revenue per available room) by JPMorgan (Joseph Greff).  This is a weekly tracker looking at yoy changes.  

– Small town and interstate Rev/PAR down 20% YoY (least bad)
– Urban Rev/PAR down 78%

So like the same migration we see from residents moving from cities to the suburbs.  So have travel plans reflected this. 

We get some key economic data this week and the biggest is the September jobs report coming out Friday am.  But the initial jobless claims improved slightly today, which is encouraging.  And while this figure remains extremely high, as GS noted earlier this week, a lot of this might reflect the fact that eligibility for the PUA (emergency assistance) is so low.

Source: Bloomberg



Similarly, the ISM manufacturing number came in today at 55.4.  This figure is about where it was for the last few months.  The ISM is a diffusion index (respondents just answer better, worse or the same), so a figure >50 means activity is expanding and a level of ISM is not necessarily correlated to GDP levels.

– US economy expansion continues = good

Source: Bloomberg


The good news we finally got a close above the key level S&P 500 3,363.31 after the S&P 500 has bumped up against this for the past few days.  The 3,224, as marked below, was important to hold as this was the level where we saw “worst is yet to come” discounted, as a 62% retrace of the June to August rally. 

And closing above 3,363.31 means the market is finding some footing, despite the poor visibility into election day.  It would certainly help if Congress could get a stimulus plan passed.  But hope for that is dimming.

POINT 1: Daily cases continue rising vs 7D ago but at a slower pace = good
Daily new COVID-19 cases came in at 44,830, which is up 2,292 vs 7D ago. Although the 7D delta of daily cases is lower than yesterday’s +5,252, daily cases are generally rising across the US.

Again, our biggest concern is if this surge in cases becomes exponential.  So, the next week will really be the key.  If daily cases don’t rise exponentially, ala France, Spain, UK, we can feel a bit more comfortable.

We can think of a few factors explaining this rise, but the most important question is whether this leads to an exponential rise:
– is this due to back to school?
– is this due to flu season (which started early August in the South)
– is this due to more testing? maybe
– is this a “Rosh Hashanah effect”? maybe

We just don’t know.  Ultimately, it is better if Americans are scared because they will be more careful.

Source: COVID-19 Tracking Project


Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average. After 6 “flat” days, the daily cases jumped in the past three days. This is a notable rise compared to other days in the past two months (ignoring the post-Labor Day spikes given they are largely due to the data distortion). 

Source: COVID-19 Tracking and Fundstrat 




Looking at the tiers of the US states, compared to 7D ago, all tiers except F-CAT see case rises. The 5 states of NY Tristate (+MA&RI) contributed +817 more cases vs. 7D ago.

Source: COVID-19 Tracking and Fundstrat  



Below we show the breakdown of the NY Tristate areas (plus MA and RI). As we wrote in the past few days, New York is facing troubling clusters of increasing COVID cases in Brooklyn, Rockland County and Orange County. As a result, the daily cases for New York is +427 higher than 7D ago. The second-largest contributor is Massachusetts, +273 cases vs. 7D ago.

Source: COVID-19 Tracking and Fundstrat




POINT 2: Deaths trends encouraging, but current hospitalizations up 8% since 9/20
No flu season? Only US 3 flu cases reported by CDC this week, compared to >200 same week last year…
Something very curious is happening.  We are already more than five weeks into flu season (it starts in the South) and the latest surveillance data from CDC shows only 3 cases are positive for flu (see below).

– this was the week a year ago, >200 samples tested positive for flu
– has COVID-19 somehow mitigated flu (due to masks, social distance, etc.)?

Source: CDC


There may be something to this as we can see there has been zero activity, essentially in flu. And in the prior year (see week 40), we can see flu was already building up quite a number of cases.  As shown below, the heart of flu season is still about 10 weeks away, or mid- to late-November.

– but it is encouraging to see flu season so mild.

Source: CDC


Daily deaths are muted… but no guarantee this remains the trend
With daily COVID-19 cases rising, we are naturally concerned about the potential rise in severe healthcare outcomes, including rising deaths as well as hospitalizations.  The daily deaths from COVID-19 are shown below as well as the 7D moving average.  The 7D mavg is around 730 per day.

– 7D daily deaths at 730 per day is well off the highs of ~2,000 in April/May and even down from 1,200 in early August
– But keep in mind, the IHME projects daily deaths to soar to nearly 8,000 per day if masks are not used.

Source: COVID-19 Tracking Project and Fundstrat


The 7D delta of daily deaths, which leads the moving average, continues to show negative values.  Thus, compared to 7D ago, there are fewer people perishing from COVID-19.  This is really one of the most important charts to watch, because if this were to turn positive, this would suggest the rise in daily cases is leading to more severe outcomes.

Source: COVID-19 Tracking Project and Fundstrat


And we can also look at the diffusion of deaths.  This chart is the % of the US with daily deaths below two thresholds:
– 88% of the USA has daily deaths <4.3 per 1mm
– 73% of the USA has daily deaths <2.1 per 1mm

These have been rising as shown below and point to a drop in COVID-19 mortality that is fairly widespread. 

Source: COVID-19 Tracking Project and Fundstrat



But hospitalizations up 8% since early September… to 30,743 from 28,611 on 9/20
While the trend in daily deaths has been encouraging, the number of Americans hospitalized for COVID-19 is up a surprising 8% since 9/20.  Yes.  It is pretty hard to believe and actually quite hard to see by looking at this chart below.

Source: COVID-19 Tracking Project and Fundstrat


This should be a reminder that we cannot be dismissive of COVID-19. There has been an upturn in hospitalizations.  We can see this more clearly looking at 7D delta in those currently hospitalized.  This is a measure of the increase into total hospitalized for COVID-19.  And this shows that there has been an upturn since late September.

– Granted, these figures are far lower than the surge we saw in July.
– But we would be wise to pay heed to this.

Source: COVID-19 Tracking Project and Fundstrat





POINT 3: Contact tracing study India: 70% people R0 = 0.  “super-spreaders” R0 = ~8.  
This week, one of the largest ever COVID-19 transmission studies was published.  The study was based upon exhaustive and intensive contact tracing of cases in India, and is the largest study done so far.  The purpose was to see the factors and causes behind COVID-19 transmission.  The conclusions really interested me.  The study was published in Science magazine (Science.org article) yesterday.

Source: Los Angeles Times


This is the study on Science.org and was led by Ramanan Laxminarayan, who is the founder and director of the US-based Center for Disease Dynamics, Economics & Policy (CDDEP) in Washington, D.C., and a senior research scholar and lecturer at the Princeton Environmental Institute at Princeton University. So, this guy has credentials.

Source: https://science.sciencemag.org/content/early/2020/09/29/science.abd7672


The scope of the study was huge. Over 575,000 individuals were contacted and are 10X largest than prior studies.

Source: Los Angeles Times


70% of individuals R0 = 0, 8% of people R0 = 8 or higher….
The team found some useful insights about COVID-19 transmission.  One part confirms what we already know, but the other is quite surprising:

– 8% of individuals accounted for 60% of new infections
– 70% of COVID-19 infected were not linked to new cases

Source: Los Angeles Times 


The bottom line, 8% of infected are extremely dangerous, because they are super-spreaders…
The bottom line is that 8% of infected people are super-spreaders.  In other words, COVID-19 is largely are the result of super spreaders.  If I simplified this math:

–   8% people –>   60% new infections  -> R0 ~8
– 22% people –>   40% infections          -> R0 ~2
– 70% people –>     0% infections          -> R0   0

Source: senior year high school photo of Fundstrat employee (unnamed)


The research could not determine what makes someone a super-spreader, but they found more evidence it is environmental, rather than based upon the biology of the person. The key environmental factors:

– proximity to infected
– length of contact
– ambient conditions

Source: Los Angeles Times  



Here is the scary thing — if someone meets a “super spreader,” the attack rate is 11% — in the right settings…
This statement can easily be misconstrued.  And my own interpretation is not exactly complete.  But look at this sentence from the study:

– “secondary attack rate was 10.7%” (risk of transmission from infected to exposed person)

Yikes.  That means you have a ~11% chance of catching COVID-19 if you are near a super-spreader.

Source: https://science.sciencemag.org/content/early/2020/09/29/science.abd7672


Fortunately, this is termed to mean being in a risky environment:

– no PP&E
– no masks
– indoors
– exposed for a long time


So the bottom line, please avoid these settings, particularly if your superpower is detecting COVID-19 infected.