June 29, 2020

Covid-19 : Tracking the Recovery – June 29, 2020

To date the number of confirmed cases of the novel Coronavirus has reached over 10 million worldwide, with over 500 thousand deaths. Statistically, the U.S. represents approximately one quarter of each of these astounding figures. The resurgence in the spread of the virus has accelerated in certain areas of the U.S. during the last two weeks. Covid-19 cases continued to rise in 33 states that show rolling averages risking week-over-week, with the most notable escalations taking place in California, Arizona, Texas, Florida, and the Carolinas. Daily new cases have now reached levels not seen since early April when the spread of the deadly virus peaked in the Northeastern. At the time of this writing Florida has reported a record number of cases and has announced the closure of bars to help control the spread, as well as beaches in certain counties for the upcoming holiday weekend. Additionally, seven states reported new highs for (closely followed) Coronavirus hospitalizations including: Arizona, Arkansas, California, North Carolina, South Carolina, Tennessee and Texas. While hospital capacity has been sufficient to cover the increase in cases, officials across several states have expressed concern should the trajectory continue unabated in the coming weeks. Houston, for example, has been hit particularly hard and is reporting strains associated with a hospital system that is approaching capacity.

Travel restrictions have reemerged in some states initially hit particularly hard early in the pandemic. On June 24th, New York, Connecticut, and New Jersey announced restrictions on travelers entering from 14 states exhibiting elevated Covid-19 cases. Any person flying into those states will be required to self-quarantine for 14 days prior to engaging in community activities. At the same time the Governor of North Carolina announced a “pause” in the re-opening process, keeping the state in Phase 2 for an additional three weeks. He also is now requiring the use of masks in public places. The following day, the Governor of Texas announced a similar pause in the reopening process, only to follow up by announcing the closure of bars the next day. The Governor of California also ordered several hard-hit counties to close bars to the public.

While both new infections and hospitalizations have increased, daily deaths have continued a downward trend since peaking in mid to late April. There are several possible explanations for this including an inherent lag between hospitalizations and mortality, more effective treatment, as well as a significant decline in the average age of infected persons. Whether or not the increase in cases ultimately results in a resurgence in mortality rates is of course of great concern.

Meanwhile, most states have continued as planned to reopen on their previously determined timelines. At this juncture, one thing seems clear, when businesses begin to open, consumers are willing to reengage. Air travel is up 400% from its record low set in April. While this remains well below normal activity, the dramatic increase reflects consumers’ willingness to move on with their lives despite increased risk of illness, at least thus far. Many feared that crowds gathering at recent high-profile demonstrations would result in an uptick in infection activity. Early testing results, however, indicate infection rates have not increased in areas of significant protest activity for the time being.
From an economic perspective we continue to watch the reopening process both here at home and abroad. Much like in the U.S., each country is taking its’ own approach based on the information on the ground. As we continue to monitor these conditions, we are remaining focused on large-scale pullbacks or pauses in reopening plans along with infection, hospitalization and mortality rates. At the outset, we expected an increase in consumer activity would result in a greater amount of infection. Should those increases lead to strains in healthcare systems and higher mortality rates, we would expect local officials to alter their plans accordingly. Here in the U.S., Texas, California, Arizona, and Florida will be key states to watch over the coming weeks as officials in these states are currently struggling with balancing the tradeoff between public safety and economic recovery.

As always, we will continue to provide you with updates in the most comprehensive, cohesive, and timely manner possible.