COVID-19 UPDATE: 105 million passengers flown since 4/1/2020, and only 1,600 "infected flying" -- being on an airplane is 20X safer than walking the streets of NYC.

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HEADS UP: There will be no updates Friday and no updates next Monday. I will be getting surgery to repair my ACL on 10/22 and will be recovering on those dates. 

STRATEGY: The things we are “afraid of” are proving to be far safer
While COVID-19 case trends are worsening in the US and even worse in Europe, not all is negative regarding COVID. In this commentary, we highlight two things that are actually far better than expected. 

First, we are now starting to lean towards measuring COVID-19 waves in the US via the level of hospitalizations and the rate new cases are seeing hospitalizations. As we discuss below, in wave 1 and wave 2, the total hospitalized peaked at ~59,000 vs 37,000 currently. Moreover, several states saw hospitalized per 1mm exceed 300. In wave 1, it was NY, NJ, CT, MA and in wave 2, it was FL, AZ, TX. In wave 3, only South Dakota is there. So, wave 3 seems very muted. So far. 

Second, it seems many things we were “afraid of” are not as bad as feared. In particular, we look at airline travel and COVID-19 spread. Here is a way to look at it. 

Since April 1, the TSA has processed 105 million passengers to travel on a flight. So, think of this as 105 million interactions. Of this, the TSA has identified 1,600 who traveled while infected (and of those, zero confirmed community transmissions, see below). 

That is 1 in 9,545 being infected. The odds of passing an infected in the US while walking the streets is currently 1 in 500. So, you are 20x less likely to encounter an infected on a plane than on the street. 

This speaks to the safety protocols used by airlines and the low community transmissions show air quality is quite good. 

What else were we afraid of that proved to less scary?
– professional sports
– schools
– restaurants
– subways
– casinos (yup)
– grocery stores
– retail stores
– beaches
– mass protests


What is worse?
– bars
– nursing homes
– homeless shelters
– prisons
– choir practice
– vaping
– huge weddings

So, on balance, there are more things that are better. And those that are better are actually key to the economy. The things worse have less impact.

Equities caught a bid yesterday and this was due to perceived progress on fiscal stimulus. This is the only thing that matters for the next 24 hours. 

But for the post-election, we still see cyclicals leading. 




POINT 1: Daily cases 57,101, up 8,418 vs 7D ago — COVID-19 still spreading in US
The latest COVID-19 daily cases came in at 57,101, up +8,418 vs 7D ago. The daily cases in the US continue to rise. The 7-day delta in daily cases has been over 8,000 in the past two days which reminds us that COVID-19 is still spreading in the US. However, compared to the first two waves in March/April and June/July, the severity of infected cases has been dropping. We will discuss more in Point #2.

Source: COVID-19 Tracking Project  and Fundstrat


US daily cases 7D delta is up but not exponential…
Again, the daily change vs 7D ago, in our view, is the leading indicator as it is what influences the 7D moving average.

– As you can see below, the 7D delta in daily cases is flat last few days
– This is not an exponential surge, which is good
– It has not yet happened, but it could
– Next few weeks are key
– As we wrote last week, some states seem to be hitting the “upper limit” of daily case velocity
– Meaning, we could see cases slow within the next few weeks

Source: COVID-19 Tracking and Fundstrat  


Wisconsin has the second highest daily cases and largest 7D delta of daily cases in the US. This is partially because of its system maintenance over the weekend. And Tuesday’s stats reflect the cases from the past few days.

Source: WI Health Department Twitter

Source: COVID-19 Tracking and Fundstrat




POINT 2: Is hospitalization a better measure of this wave?
I am starting to think measuring hospitalizations is a better way to measure the severity of these COVID-19 waves.  Cases still matter, because it is a leading indicator, but the severity of the cases (% hospitalized) is dropping.  So from a measurement perspective, perhaps looking at “total currently hospitalized” is a better measure of the severity of these waves:

– Wave 1 peaked with 58,926 hospitalized
– Wave 2 peaked with 59,660 hospitalized
– Wave 3, currently ~37,000 hospitalized

So wave 3, while rising, is not at the intensity of the prior waves.

Source: COVID-19 Tracking Project and Fundstrat


As we wrote about previously, only 1% of incremental cases are being hospitalized, which is a far lower rate than seen during the surge of the April and July heights.  So this is a good thing.

– as to why? is it younger patients? is it better care? is it less nursing homes?
– I am not sure

Source: COVID-19 Tracking Project and Fundstrat


And if we look at the rate of “hospitalized per 1mm residents” we can see the enormous burdens born by some states during the prior 2 waves.

– Wave 1, incredibly high hospitalized rates for NY, NJ, CT, MA >500 per 1mm residents
– Wave 2, FL, AZ, TX saw >300 hospitalized per 1mm residents
– Wave 3, only South Dakota is at that level

So you can see the hospitalization burden is considerably lower.

Source: COVID-19 Tracking Project and Fundstrat


Thus, we might suggest this current wave is pretty muted… so far






POINT 3: Being on an airplane is 20X safer than walking the streets of NYC.
The steady recovery in TSA traffic is encouraging but it is still down from 2.7 million at this same time last year.  But lost among this TSA traffic data is the question of the safety of flying.  Sure, people have perceptions and in fact, many think flying is unsafe because one is strapped into a seat and confined in a space with hundreds of people. 

Source: TSA

There has not been a single documented/contact traced case of a COVID-19 transmission on a flight
And the media has mostly written negative stories about flying.  Below is a Washington Post article citing the fact that as many as 1,600 people, who were infected and contagious, flew on an airline.  

– Unless there are medical reasons for doing, anyone symptomatic getting a plane is a sociopath
– TSA believes this could be responsible for 11,000 possible transmissions
– The word is “possible” because not a single case of airline transmission has been confirmed

This is remarkable, not a single case of a transmission on a flight has been confirmed.

Source: Washington Post 


How remarkable are zero transmissions? Out of 105 million TSA passengers throughput? Wow
To appreciate how remarkable this is, there have been 105 million passengers processed by TSA since April 1, 2020.  So, out of 105 million cases:

– 11,000 “possible” is 0.0001% of instances, or 1 in 9,545 interactions
– The risk of interacting with a COVID-19 infected in the US currently is 1 in 500
– So being on an airplane means your odds of meeting an infected person is 1/20th that of being anywhere else in the US

Source: TSA

In other words, planes are safer than most places in the US.

This is another reason to expect airlines to stage a massive demand and asset price recovery, once, COVID-19 begins to diminish.  Their protocols make flying far safer than people realize.



By the way, Singapore Airlines is bringing back its NYC to Singapore flight. This would be the longest, or one of the longest, in the world. And a reminder that there is going to be a world post-COVID.

Source: Business Insider