We are sending an abbreviated COVID-19 update to reflect NY state data reported this am.

Equity markets are weak to kick off the second quarter, as markets continue to struggle with the combination of US case growth and the concurrent weakening fundamentals of the economy.  And while markets are down broadly today, only 6 of 136 GICS S&P 500 Industries are up, there is less of the “sell everything” move in markets and even the VIX, while up at 57, remains below the mid-80s seen a week ago. 

And while the White House has spoken of 100,000 to 250,000 total deaths and a crisis peaking in 4-6 weeks from now, the real template to watch remains New York City and New York.  NYC and NY state is where the first real exponential breakout took place and as the charts below show, this COVID crisis is first taking place in NY and then every subsequent local breakout will be the template for how NY fares (with some better vs worse based on preparedness and population density).

– On a daily basis, NY is about 40% of all new cases and 40% of all deaths, so this state is the epicenter.
– Charts below show how NY is the place to watch.  Followed by New Jersey, Louisiana, Georgia and Michigan (based on daily new cases).
– The relatively good news is the calculated death rate (total deaths/total cases) is under 2% for NY.


Why eyes are on New York to see turning point in COVID-19 crisis
Why eyes are on New York to see turning point in COVID-19 crisis



POINT #1: Data will be lumpy, but NY state’s data is flattening.
New York State reported 7,917 new cases today.  This is similar to the 7,000-ish levels seen since 3/27/2020 (with exception of the 9,298 surge yesterday) and can be somewhat encouraging, as this could suggest NY state is closer to peaking in new cases.

Governor Cuomo in his press conference spoke about how peak hospital bed needs would be >75,000 with social distance and this compares to about 16,000 statewide currently.  And about 8,500 in NYC alone.

– thus, the current expectations for NY state are still a ~5X increase in hospitalizations and if 20% require hospitalizations, implies total NY state cases will reach 375,000 from 76,000 currently.  Our a 5X increase in total cases.

– If cases rise by 7,000 per day, this implies cases would continue at this pace for another 42 days, or well in May.


Why eyes are on New York to see turning point in COVID-19 crisis



POINT #2: Can NY state do better than this?  Yes
The case laid out by Cuomo is reasonable, in the sense that it is no doubt based on sound epidemiological models.  
But social distancing has been in place and this could flatten the curve.

That is what we are watching and it is entirely possible NY state way outperforms this.

This would be a good thing from a market’s perspective.

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