FAST FIVE: Coronavirus Cases Vs Fatalities: "Why The Next 6 Days Will Be Crucial"
Of course, this is a simplified assessment of the current debate.
For a more nuanced take we go to JPM's Nikolaos Panigirtzoglou who over the weekend wrote that the bank sees little evidence that the virus transmission rate, the so-called R, is increasing at an alarming rate.
If we instead focus on hospitalization data from the CDC to gauge severity of the outbreaks, they suggest far more modest increases in most cases.
That said, there is a clear reflexivity in behavior in the context of the recent news, and while the severity thus far looks more muted, JPM points out that negative headlines as well as the risk of some roll-back of re-opening measures, as already announced in Texas, California, Arizona and New Jersey could induce more cautious behavior by people and potentially slow the growth recovery going forward.
We mostly buy into a combo of factor i) and ii).” Larsen then echoes JPMorgan, and warning that consumption may take a “lock-down like” hit if the virus spread is not under control, said that a “hammer and dance” strategy (swift total lockdown followed by a wide testing strategy) is ultimately the cheapest medium-term strategy.