Study suggests few Americans have Covid-19 antibodies Survey of dialysis patients indicates majority may not have an immune response despite high infection numbers
The FT summed up The Lancet’s article writing that “fewer than 10 per cent of Americans have antibodies that could protect them from developing Covid-19. (…) Higher rates of antibodies were found in the north-east, with New York state, the early epicentre of the virus in the US, having by far the most, at 21.5 per cent of the population. The west was the region with the lowest rates, between 3.6 and 4.9 per cent. (…) The proportion required for herd immunity can range between 50 and 90 per cent, depending on the disease, according to Johns Hopkins.”
The Lancet’s article is here. There is also a comment piece by two researchers at Imperial College:
(…) By testing the remainder plasma of 28 503 randomly selected patients receiving dialysis in the USA, they were able to test an unbiased sample of an important patient group across the entire country.
Importantly, Anand and colleagues chose a good test for their survey. The Siemens lab-based spike-protein-receptor-binding domain total antibody chemiluminescence assay adopted by the authors was the best-performing platform in the largest external appraisal of commercial assays to date, in terms of both sensitivity and specificity. Their choice negates the need for major adjustment of the raw data to obtain reliable prevalence estimates.
The authors standardised data by age, sex, region, and race and ethnicity to provide the first nationally representative estimates of SARS-CoV-2 seroprevalence in the US dialysis and US adult populations, with samples taken in July, 2020. Using anonymised demographic data, residence, postal codes, census data, and publicly available COVID-19 burden and community mobility data, the authors provide estimates for differences in seroprevalence by neighbourhood, race and ethnicity, poverty, population density, and mobility restriction.
The findings are striking. 2292 dialysis participants had SARS-CoV-2 antibodies, comprising 970 (42·3%) women and 1322 (57·7%) men, the majority of whom (1765 [77·0%]) were aged 45–79 years. This translated to a seroprevalence of 8·0% (95% CI 7·7–8·4) in the sample, rising to 9·3% (8·8–9·9) when standardised to the US adult population. There was a remarkable variation in seroprevalence by state in the sampled participants, with early pandemic hotspots such as New York (33·6%, 95% CI 31·7–35·6), Louisiana (17·6%, 10·8–28·7), and Illinois (17·5%, 15·2–20·2) recording substantially higher seroprevalence than their respective neighbouring states of Pennsylvania (6·4%, 4·7–8·8), Arkansas (1·9%, 1·0–3·5), and Missouri (1·9%, 0·9–3·8).
By comparing sample seroprevalence data from July, 2020, with Johns Hopkins University estimates of cumulative PCR-diagnosed cases as of June 15, 2020, the authors estimate just 9·2% (95% CI 8·7–9·8) of seropositive cases were diagnosed. Given antibodies take days rather than weeks to appear, this might underestimate the true proportion of patients diagnosed by swab testing. However, this finding still points to a high number of people with the virus never being tested. In the absence of clinical data, it is not clear whether this is because of asymptomatic infection or difficulty accessing testing, or other reasons.
The study also estimated substantially higher seroprevalence in residents of predominantly Hispanic (11·3%, 95% CI 9·8–12·9), non-Hispanic Black (13·9%, 12·1–16·0), and Hispanic and Black (16·3%, 14·3–18·5) neighbourhoods compared with predominantly non-Hispanic white neighbourhoods (4·8%, 4·1–5·5), when standardised to the US adult population. This alarming discrepancy is in keeping with trends identified in the largest survey from Europe and demands urgent attention.
- The beginning of the autumn surge or wave in COVID-19 spans the Northern Hemisphere. Note how poorly prepared we are, comparatively speaking, in the United States. (Cumberland Advisors)
- The coronavirus situation worsened over the last two weeks. Spread of the virus accelerated nationwide and is now spreading the fastest since early August. The “superforecasters” in the Good Judgment Project now see a 53% probability that 25 million doses of an FDA-approved vaccine will be available by March 2021 (vs. 69% two weeks ago) and a 91% probability by September 2021 (vs. 93%). (Goldman Sachs)
U.S. Durable-Goods Orders Rise for Fourth Straight Month
New orders for durable goods—products designed to last at least three years—rose 0.4% in August compared with July, the Commerce Department said Friday. The August increase was at a slower pace than earlier in the summer, when orders rebounded following a collapse in demand from early in the pandemic.
A closely watched proxy for business investment—new orders for nondefense capital goods excluding aircraft—also rose last month, increasing by 1.8%.
Orders for computers, communications equipment and machinery all rose solidly in August, helping drive the overall gain. (…) Weakness in motor-vehicle, commercial-aircraft and defense orders weighed on overall gains. (…)
This is more than a catch up from the spring, but still slower than the Dec. 2018-June 2019 0.8% monthly average gain:
CalculatedRisk informs us that, according to Wards Intelligence, U.S. September vehicle sales are expected to decline 5.2% YoY to 16.2 million SAAR. “This would put sales in 2020, through September, down about 18% compared to the same period in 2019.”
Inflation Is Already Here—For the Stuff You Actually Want to Buy Prices are rising for things people need in the pandemic, even if the overall inflation number remains subdued.
The gap between everyday experience and the yearly inflation rate of 1.3% in August is massive. The price of the stuff we’re buying is rising much faster, while the stuff we’re no longer buying has been falling, but still counts for the figures. (…)
The cost of food at home, where so many of us have been spending our time, was up 4.6% in August compared with a year earlier, the biggest rise in almost a decade. In deserted workplace and school cafeterias, food is 3% cheaper. (…)
Few home workers need a new suit or dress (down 17%), makeup (down 3%), hotel room (down 13%) or air ticket (down 23%). In vogue: sitting at home in your pajamas (men’s nightwear is up 4%), cycling (bikes up 6%), reading for pleasure (books up 4%, newspapers up 5%) and making things (sewing machines and fabric up 9%, cameras up 4%). Medical care is in demand (up 5%), while higher education is much less attractive (tuition fees up 1.3%, the lowest since data started in the late 1970s). (…)
TECHNICALS WATCH
Lowry’s Research’s Buying Power and Selling Pressure measures threaten to cross putting SP in the dominant position. In spite of rising markets Friday, BP declined and SP rose. The gap between them is now 4 points. It was 19 the week before, 46 at the Sep. 2 high and 87 at its recent widest gap in early June. Selling Pressure remains subdued while Buying Power has been steadily declining since mid-June even as most equity averages look technically oversold by some measures.
Now that Big Mo is out of the way, the hope is that TINA and FOMO will continue to keep sellers quiet until something (?) gets buyers enthusiastic again.
Keep in mind that broad averages such as the Value Line Geometric Index (-10.0%) and the NYSE (-12.0%) remain below their pre-pandemic highs and are still displaying descending 200-day moving averages. The same can be said of the equal-weigh SPY (-10.6%).
Fewer people seem to care about TINA and FOMO anymore. U.S. equity funds lost $25.8 billion in assets during the week ended Sept. 23, the third-largest weekly outflow on record. And
Funds in Refinitiv Lipper’s Science & Technology (tech sector) classification (including both mutual funds and ETFs) suffered net outflows of $1.3 billion for the fund-flows week ended Wednesday, September 23. This was the tech sector fund group’s fifth largest one-week net outflow in its history (Refinitiv Lipper began tracking fund flows data in 1992). As could be expected from this peer group, its performance (both from a fund flows and total return perspective) has mirrored that of the technology-heavy NASDAQ Composite Index. (…)
After its record-setting net inflows since the end of Q1, tech sector funds have now suffered net negative flows in three of the last five weeks and their performance has trended down as well, retreating 6.6% over the same time frame. Since its recent high on September 2, the NASDAQ Composite has now entered correction territory, losing 11.5% of its value in the 15 trading sessions since then. (…)
And last Friday, a strong day, the Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 Index with $128 billion in assets, had a $3.5 billion outflow, the largest one-day loss since October 2000.
IPO Market Parties Like It’s 1999 Even in the midst of a recession, investors are pouring money into newly public companies at levels on par with the dot-com era
(…) Bankers, lawyers and executives say that if the frenetic pace keeps up, 2020 will eclipse the tech-boom years of 1999 and 2000, when investors feverishly pumped money into burgeoning internet stocks before they crashed to Earth. (…)
This year, more than 80% of the money raised by initial public offerings falls into three buckets: healthcare, technology and newly popular blank-check companies—shell firms whose only purpose is to acquire a private target and take it public. That is the most concentrated the IPO market has been since 2007, according to Dealogic, when new listings of banks and lending institutions flooded the market before the financial crisis.
More than 235 companies have joined the U.S. public markets this year, on track for the most since 439 companies went public in 2000, according to Dealogic. (…)
Public investors are also rewarding high-growth companies with big valuations they are unlikely to fetch in the private markets—a change from a few years ago. Companies are now trying to hit a sweet spot, going public after they’ve had a chance to mature a bit but before their strong growth trajectory has slowed. (…)
Blank-check companies [SPACs] have exploded this year as an alternative to the traditional IPO, accounting for more than 40% of the money raised in IPOs this year. That compares to an average of 9% over the previous 10 years, according to Dealogic. (…)
The chart below from SPAC Research is as of September 11, 2020. One week later, 95 has grown to 104 with 48 more filed but pending.
Amount Raised in IPOs ($billions) Number of IPOs
What is a SPAC?
- A SPAC is a company, with no initial assets or operations, that raises capital through an initial public offering (“IPO”). The IPO proceeds are held in a trust for up to a defined period of time (typically 18 to 24 months) for the purpose of acquiring a private business, known as the “De-SPAC Transaction”.
- Unlike in the case of the typical private fund, retail investors can invest in a SPAC IPO and there is no private placement restriction on advertising the SPAC IPO. SPAC units are traded on the secondary market.
- SPAC investors have limited downside exposure given that investors are entitled to vote to approve or disapprove the De-SPAC Transaction. If the transaction is not approved, 100% of the trust proceeds, plus accrued interest, are returned to the investors, and investors have the right to redeem their own shares for cash at the time of the De-SPAC Transaction.
- In addition, current SPAC structures provide holders of Class A Shares with the right to redeem their common shares for trust proceeds, regardless of whether they vote to approve the business combination, allowing these investors to preserve the potential upside of their warrants in the event the De-SPAC Transaction is successful. Certain SPACs restrict the portion of Class A Shares that a particular holder is permitted to convert to cash (e.g., at 10% of a person’s Class A Shares).
- Private operating companies can use a SPAC to become a public company without going through the traditional IPO process since the SPAC is already publicly listed and typically meets the requirements for trading on the relevant stock exchange. This process results in a much quicker time frame and can reduce market pricing exposure since the terms are negotiated and agreed with the SPAC.
- SPAC sponsors are compensated similarly to a private fund sponsor in that they receive a “promote” for sponsoring the SPAC; however, in the case of a SPAC, the sponsor typically receives 20% of the shares of the SPAC for a nominal investment [B shares].
- Class B Shares are generally not redeemable prior to the De-SPAC Transaction, are not entitled to vote for the De-SPAC Transaction or to extend the initial time period required to consummate a De-SPAC Transaction, and do not have the right to participate in the trust proceeds. The SPAC sponsor also typically receives founder warrants in exchange for its payment of the underwriting discount and may receive restricted Class A Shares. Generally speaking, all of the securities owned by the SPAC sponsor are subject to various contractual and legal trading restrictions for certain periods of time.
- However, there are several conflicts of interest and fiduciary duty issues that investors should consider. The economic rights of the SPAC sponsor and the holders of Class A Shares are not necessarily aligned. The SPAC sponsor has the potential upside of the promote, while the Class B Shares and founder warrants will become worthless if there is not a successful De-SPAC Transaction. Therefore, the SPAC sponsor may be incentivized to try and consummate a less than favorable De-SPAC Transaction rather than see the trust proceeds returned to the holders of Class A Shares, irrespective of the prospects of the post-business combination public company. Conversely, holders of Class A Shares may seek to block a De-SPAC Transaction or win concessions from the SPAC sponsor in exchange for their vote to approve the De-SPAC Transaction and/or agreement not to redeem their Class A Shares. (Seward & Kissel LLP)
There are currently 175 active SPACs valued at $55 billion, 40 of which have completed an Initial Business Combination (IBC) and only 2 liquidated SPACs.
Some 3,500 U.S. companies sue over Trump-imposed Chinese tariffs
About 3,500 U.S. companies, including Tesla Inc TSLA.O, Ford Motor Co F.N, Target Corp TGT.N, Walgreen Co WBA.O and Home Depot HD.N have sued the Trump administration in the last two weeks over the imposition of tariffs on more than $300 billion (£235.35 billion) in Chinese-made goods. (…)
On Sept. 15, the World Trade Organization found the United States breached global trading rules by imposing multibillion-dollar tariffs in Trump’s trade war with China.
The Trump administration says tariffs on Chinese goods were justified because China was stealing intellectual property and forcing U.S. companies to transfer technology for access to China’s markets.
