U.S. Household Spending Rose 1.4% in September U.S. households boosted spending last month as incomes rose, another sign the economy continued recovering into the fall from damage inflicted by the pandemic.
(…) Personal income—a measure of what households receive from wages and salaries, government aid and investments—was up 0.9% last month, after a sharp decline in August, rising on higher pay and remaining pandemic-related aid. (…)
Goods spending rose 2%, on a seasonally adjusted monthly basis. Spending on services was up 1.1% over the month, with higher outlays on health care, fitness and entertainment. (…)
The pickup in personal income last month reflected the effect of a federal supplement to state unemployment benefits that provides recipients with an extra $300 weekly. The end of a separate program that provided a $600 weekly bonus to recipients of unemployment benefits weighed on personal income last month, similar to August.
Personal income in September, nonetheless, was buoyed by a rise in compensation of employees, including for temporary Census workers, the Commerce Department said. Wages and salaries rose 0.8% last month, a smaller gain than the prior month. (…)
(Haver Analytics)
While spending on goods (retail sales) remained strong in September, total consumer expenditures continue to track trends in wages and payrolls which are 3-4% lower than in February. The savings rate declined only slightly from an upwardly revised 14.8% in August to 14.3% in September.
The decision by Congress not to extend the CARES act will likely hit spending in Q4.
- “our SpendingPulse estimates for quarter three show U.S. retail sales up 1.8% versus a year ago, ex-auto, ex-gas.” – Mastercard (MA) CEO Ajay Banga (via The Transcript)
- “JPMorgan Chase & Co.’s tracker of credit- and debit-card transactions showed that spending was down 5.2% from a year earlier in the week through Oct. 25.” (WSJ)
- “In most countries, consumers intend to continue shifting their spending to essentials, while cutting back on most discretionary categories. However, in China and India, spending is bouncing back beyond grocery and household supplies. Chinese consumers plan to increase spending on discretionary categories such as travel and apparel, suggesting that the country is further along the path to recovery than other countries. In India, consumers report a higher intent to spend across categories as they prepare for upcoming festivals (Diwali, for example) and the wedding season, which runs from October to December.” (McKinsey)
‘It’s a grim cut off’: Washington abandoned a stimulus deal, so much of America’s temporary financial safety net will expire A wide range of financial assistance programs designed to help people stay in their homes, stay current on their student loans, keep their lights on and meet other financial obligations during the pandemic-induced economic downturn are scheduled to end on or before Dec. 31.
(…) Under the $2.2 trillion CARES act passed in March, homeowners with federally-backed mortgages — which includes loans backed by Fannie Mae, Freddie Mac, the FHA, the Department of Veterans Affairs and the U.S. Department of Agriculture — can request up to a year’s worth of forbearance on their home loan.
The legislation required mortgage servicers to provide an initial forbearance period of 180 days, at the end of which borrowers could request an extension of 180 days. The bill did not require that borrowers show proof of financial hardship to qualify.
Because many homeowners initially requested forbearance back in the spring, their initial forbearance periods will end soon. If they still cannot afford to make their monthly payments, they need to request an extension from their loan servicer. Otherwise, the servicer will move to set up a repayment plan.
Homeowners should know they aren’t expected or required to make all of their missed payments at once. They can work with their servicer to set a suitable repayment plan, which could include an adjusted interest rate or longer loan term.
In August, the Federal Housing Finance Agency and the Federal Housing Administration both extended their moratoriums on foreclosures until the end of the year. These protections apply to any homeowners with federally-backed mortgages.
Under these orders, mortgage servicers are barred from pursuing new foreclosure actions against homeowners and evicting households. homeowners whose mortgages aren’t backed by the federal government can be foreclosed on or evicted.
It is not yet clear whether the federal agencies will extend these moratoriums into 2021; however both agencies have extended their bans on foreclosures multiple times.
Before the CARES Act, self-employed workers, freelancers, gig workers and independent contractors were all ineligible for unemployment benefits. With the CARES Act, however, these workers became eligible for the $600 a week in federal unemployment benefits, which expired in July. They were also eligible for state unemployment benefits that were calculated based on the average weekly unemployment benefits in their state.
These state-level benefits, known as Pandemic Unemployment Assistance, expire Dec. 31. Come Jan. 1, more than 11 million Americans, including wedding photographers, Airbnb hosts and Uber UBER, -1.90% and Lyft LYFT, -0.43% drivers, will see their benefits reduced to zero. (…)
The Families First Coronavirus Response Act applies to people who have to stay away from their job because they have to quarantine. The law also applies to workers who need to stay home to take care of a loved one, like a child who’s suddenly stuck at home because of a school closure.
Pay amounts depend on whether the leave has to do with medical reasons or family care. For example, someone who is taking sick leave can receive up to $511 daily and $5,110 in total, according to the Department of Labor. A worker can also receive up to $2,000 in a two-week period for child care under one part of the law, and an additional $10,000 for another 10 weeks of leave under another part of the law. Small businesses with fewer than 50 employees can apply for exemption from the law if they can say granting leave will jeopardize business operations. (…)
President Donald Trump extended the pause on payments and collections for some federal student loans through Dec. 31. (…)
With stimulus talks at a stalemate in late summer, Trump signed an executive order allowing employers to temporarily stop deducting 6.2% from an employee’s paycheck for Social Security taxes. The deferral is in place from Sept. 1 to Dec. 31 and it applies to people making under $104,000 annually.
It’s up to employers to decide whether to arrange a deferral for their employees. But one expert noted that if a paycheck is larger now because it’s forgoing the tax, it’s going to be smaller starting next year. That’s because the worker’s 6.2% tax obligation will be back in effect — and they will also be paying the deferred taxes from September through December. (…)
As of August, more than 10% of the eight million single-family mortgages backed by the FHA were delinquent by more than three months. (Bloomberg)
THE MANUFACTURING PMIs
Note: the U.S. PMI is out later this morning.
The IHS Markit Eurozone Manufacturing PMI® indicated a further improvement in manufacturing sector growth during October. After accounting for seasonal factors, the headline index moved up to 54.8, from 53.7 in September and better than the earlier flash reading. October’s number was also the best recorded by the survey for 27 months and maintained the current run of continuous growth that began in July.
Growth was seen across all three market groups during October, albeit to varying degrees. The fastest expansion was seen in investment goods, where growth improved to its highest level for over two years. A solid gain was seen in intermediate goods, but growth weakened to a marginal pace amongst consumer goods producers.
Germany was again the best-performing country, with the respective PMI hitting its highest level for over two-and-a-half years. Austria experienced its best PMI outcome for nearly two years, whilst Italy saw an acceleration in growth to a 31-month high.
Elsewhere, Spain saw a solid expansion, but growth was only modest in France and marginal in both the Netherlands and Ireland. Greece was the only country to record a deterioration in operating conditions.
A fourth successive monthly increase in manufacturing production was recorded during October, with the rate of growth strengthening to its sharpest for over two-and-a-half years. A similarly sized increase in new orders was also recorded, with growth in October the best seen since the start of 2018. Germany led the way in terms of both output and orders, with growth in the latter a national survey record.
Gains in overall new orders reflected stronger demand from both domestic and external clients. New export business rose at a noticeable rate that was the best recorded by the survey since February 2018.
Sharply rising levels of new business helped to drive growth of work outstanding for a third successive month. Moreover, the rate of increase was the sharpest recorded by the survey since February 2018. Despite this, employment levels continued to be cut, extending the current period of contraction to a year-and-a-half.
Manufacturers raised their purchasing activity at a marked pace during October, with growth the best since early-2018. This raised pressure on suppliers, who struggled to keep up with heightened demand, as evidenced by another notable lengthening of lead times (the sharpest for five months).
Companies subsequently chose to utilise inventories of raw materials and semi-manufactured goods, with latest data showing a twenty-first successive monthly decline in stocks. Inventories of finished goods were also depleted markedly, falling for a fifth successive month.
Price data indicated a third successive monthly increase in average input costs, with the rate of inflation the fastest for 20 months. Firms were able to pass on a proportion of their higher input costs to clients as signalled by a first, albeit marginal, increase in output charges since June 2019.
Looking ahead to future production, business confidence remained positive for a fifth successive month. Italian and German manufacturers were the most optimistic about output over the coming 12 months.
Chris Williamson, Chief Business Economist at IHS Markit:
(…) The renewed weakness of consumer-facing businesses serves as a reminder that, while manufacturing as a whole may be booming for now, the sustainability of the recovery will depend on household behaviour returning to normal and labour markets strengthening. Given second waves of virus infections, this still looks some way off.
October survey data pointed to a marked improvement in business conditions across China’s manufacturing sector, with firms recording sharper rises in both output and total new work. However, growth in new export sales softened notably amid a resurgence of the coronavirus disease 2019 (COVID-19) virus across a number of export markets. Nonetheless, stronger overall market conditions led to an improvement in business confidence, which hit its highest since August 2014.
The headline seasonally adjusted Purchasing Managers’ Index ™ (PMI ™ ) rose from 53.0 in September to 53.6 in October. The reading signalled a marked improvement in business conditions that was the strongest since January 2011. The headline PMI has pointed to an improvement in the health of the sector for each of the past six months.
Supporting the higher PMI figure was a sharper increase in total new work during October. The latest upturn in overall sales was the sharpest since November 2010, with panellists widely commenting that market conditions continued to recover from the COVID-19 pandemic earlier in the year. Although new export work also rose further, the rate of growth slowed notably and was only marginal. There were reports that the pandemic and rising infection rates across external markets had dampened growth of new business from overseas.
The substantial increase in overall workloads led manufacturers to expand their output again in October, with the rate of growth among the sharpest seen over the past decade.
Greater inflows of new work also exerted further pressure on capacities,as shown by a sustained rise in the level of work-in-hand (but not yet completed). The rate of backlog accumulation was little-changed from September and solid. However, companies maintained a cautious approach to staff numbers in October amid reports of efforts to contain costs. Consequently, firms raised their staffing levels only slightly.
Manufacturers raised their buying activity in response to higher operational requirements, and at a solid pace. As a result, stocks of purchased items rose at a rate that, though modest, was the quickest since July 2016. The delivery of goods to clients meanwhile led to a slight dip in inventories of post-production items.
The time taken for purchased inputs to arrive at Chinese manufacturers lengthened slightly in October. Some firms mentioned that low stock levels and staff shortages at suppliers had weighed on overall vendor performance.
Latest data showed a weaker increase in average input costs during October, with operating expenses rising modestly overall. Panel members generally linked the upturn to an increase in raw material prices. Companies partially passed on higher cost burdens to clients by raising their average selling prices. The rate of charge inflation was mild, however, despite quickening since September.
Reflective of the strong improvement in overall market conditions, business confidence regarding the 12-month outlook for output improved to its highest since August 2014. Panel members generally expect the impact of the pandemic to subside and global economic conditions to recover over the next year.
The latest PMI® data pointed to a further move towards more stable operating conditions across the Japanese manufacturing sector in October. Panel members reported further, albeit softer, falls in output and new orders, with companies continuing to report an overall negative impact of the coronavirus disease 2019 (COVID-19) pandemic on production and client demand. Meanwhile foreign demand for Japanese goods rose for the first time in close to two years as external markets gradually recovered. Firms in the manufacturing sector were increasingly optimistic of a rise in output over the coming year, as many expected the pandemic to end and to return to pre-crisis demand conditions.
The headline au Jibun Bank Japan Manufacturing Purchasing Managers’ Index™ improved to 48.7 in October from 47.7 in September. Although signalling a further deterioration in the overall health of the sector, the rate of contraction was the softest since January and only mild. The latest figure also represents a far slower deterioration in operating conditions compared to those seen at the height of the pandemic in the second quarter.
The higher headline index reading was supported by softer falls in output and new work. The latest contraction in production was the slowest since November 2019 and mild. This nonetheless extended the current sequence of decline to 22 months, with companies attributing recent weaknesses to the pandemic.
Similarly, subdued trading conditions continued to weigh on overall new business for Japanese manufacturing firms, as new orders remained in contraction territory. That said, the pace of decline eased to its softest since July 2019 and was only modest. New export orders meanwhile recorded an expansion for the first time in close to two years in October, as manufacturers pointed to improving demand in external markets, particularly within the Asia-Pacific region.
However, the rate of job cuts quickened in October, following a near-stabilisation in the workforce in September. Firms commonly cited a lack of demand due to COVID-19 as a key driver of job cuts. Spare capacity remained within Japanese manufacturers, as backlogs of work fell for the twenty-second month running, albeit at the softest pace since January.
In response to falling output and orders, purchasing activity declined further in October. Despite a softer fall compared to September, the pace of contraction was solid overall. Japanese manufacturers also noted difficulties in sourcing raw materials and inputs due to longer supplier delivery times. Furthermore, holdings of both raw materials and finished goods decreased further in October.
Input cost inflation strengthened in October and, though modest overall, was the strongest since January. Firms often linked a rise in average cost burdens with higher raw material and transportation costs. Average output charges meanwhile rose for the first time since January, as firms partially passed on some of the increases in input costs to customers.
Business confidence regarding activity over the next 12 months improved again in October. Expectations for output were at their highest since July 2017, reflecting hopes of a return to pre-crisis demand conditions once the virus subsides.
Tech Startups Say New Pay Rules for H-1B Visas Are Unaffordable New rules from the Trump administration restricting skilled foreign workers are unnerving U.S. startup hubs, as founders and investors say the limitations will hamstring their ability to recruit top-tier talent.
Those rules hit especially hard for technology startups, whose founders and rank-and-file are often immigrants and which usually pay employees a lower salary but compensate with stock options. Many salaries under the new rules start at $208,000, even for inexperienced workers.
“It’s already expensive, it was already a high bar, and we are making it prohibitive,” Kate Mitchell, co-founder of venture-capital firm Scale, said of the H1-B program.
The administration has said the rules are designed to ensure U.S. workers get priority for jobs. (…)
Some founders say they are shifting hiring and growth plans away from the U.S., establishing engineering hubs in Eastern Europe and sending new recruits from American universities who would require a U.S. visa to work instead at satellite offices in Canada.
Nearly a third of all venture-backed startups are founded by immigrants, according to a 2016 report from the National Bureau of Economic Research. More than half of startups valued at $1 billion or more have at least one immigrant founder, according to a 2018 paper from the National Foundation for American Policy, a nonpartisan think tank.
Several of the highest-valued venture-backed companies today, including payments company Stripe and stock-trading app Robinhood, have at least one immigrant founder and collectively thousands of employees. (…)
Under the changes, an entry-level computer programmer in San Francisco would be required to receive a salary of $111,946, compared with the previous wage requirement of $78,125, according to Labor Department data.
For more than 18,000 jobs, including a number of common tech jobs such as a San Francisco-based software developer, the Labor Department has determined a salary floor of $208,000 annually, regardless of skill. Many startups aren’t able to bear these costs. Equity, bonuses and other types of compensation don’t count toward the salary requirements, according to government rules.
“I just honestly don’t see how we can hire other people who need H-1B sponsorship,” said Marcie Black, co-founder and chief executive of Massachusetts-based medical technology startup Advanced Silicon Group, which builds sensors that could be used to improve the accuracy of rapid tests to detect diseases—crucial technology in a pandemic. That poses a problem: Roughly nine out of every 10 applicants for open positions at her startup aren’t U.S. citizens.
An analysis from the National Foundation for American Policy found the wages mandated under the new rule are significantly higher than current market wages.
A second set of rules set to take effect in December will narrow the types of degrees that could qualify an applicant and shorten the length of visas for certain contract workers. Ken Cuccinelli, the No. 2 official at the Department of Homeland Security, said he expects about one-third of H-1B visa applications would be rejected under the new restrictions. (…)
The Trump administration also reversed an Obama-era initiative to create a temporary pathway for foreign-born entrepreneurs to build startups in the U.S. (…)
Oil dropped to a five-month low as the market prepares for another double-whammy demand and supply shock. A barrel of West Texas Intermediate for December delivery was trading below $35 this morning as the market digests Libyan output which is rapidly rising towards 1 million barrels a day. (Bloomberg)
EARNINGS WATCH
From Refinitiv/IBES:
Through Oct. 30, 319 companies in the S&P 500 Index have reported earnings for Q3 2020. Of these companies, 86.2% reported earnings above analyst expectations and 10.7% reported earnings below analyst expectations. In a typical quarter (since 1994), 65% of companies beat estimates and 20% miss estimates. Over the past four quarters, 73% of companies beat the estimates and 21% missed estimates.
In aggregate, companies are reporting earnings that are 19.5% above estimates, which compares to a long-term (since 1994) average surprise factor of 3.5% and the average surprise factor over the prior four quarters of 8.7%.
Of these companies, 80.3% reported revenue above analyst expectations and 19.7% reported revenue below analyst expectations. In a typical quarter (since 2002), 60% of companies beat estimates and 39% miss estimates. Over the past four quarters, 61% of companies beat the estimates and 39% missed estimates.
In aggregate, companies are reporting revenue that are 2.6% above estimates, which compares to a long-term (since 2002) average surprise factor of 1.5% and the average surprise factor over the prior four quarters of 1.1%.
The estimated earnings growth rate for the S&P 500 for 20Q3 is -10.2%. If the energy sector is excluded, the growth rate improves to -6%. The estimated revenue growth rate for the S&P 500 for 20Q3 is -2.9%. If the energy sector is excluded, the growth rate
improves to 0.2%.
The estimated earnings growth rate for the S&P 500 for 20Q4 is -12.1%. If the energy sector is excluded, the growth
rate mproves to -9.1%.
Pretty remarkable earnings season amid such complicated times. Beat rates and surprise factors are strong across the board. The 10.2% drop in S&P 500 earnings is half what was expected on Oct. 1. Ex-Energy, earnings are seen down 6.0% after -12.1% in Q1 and -24.1% in Q2. This with Industrials earnings down 55%.
Analysts are revising up but remain conservative with Q4 earnings seen down 12.1%, only slightly better than the -13.6% expected on Oct.1.
Trailing EPS are now $139.19, up from $136 two weeks ago. First sequential reversal since April.
Full year 2020 EPS are now forecast at $133.55. 2021: $167.10.
Investors will likely remain very cautious with earnings forecasts given the rising case counts and lockdowns but corporate America has once again demonstrated its resilience.
But, let’s not get too carried away. Some of these beats and surprises likely come from the pandemic itself. Here’s what Moelis & Co’s CFO said last week:
Right now we feel like it’s exceptionally busy and two things are happening, one is we’re getting extraordinary efficiency in the way the bankers use their time — I mean literally our bank — I’ve talked to bankers and they’re on their resume from all the way 7:00 AM to 7:00 at night. I used to ask your banker, were you busy this week? And they said well I had to travel to Germany and then I came back and I had to get to the West Coast and then came back and so they’re literally talking about two-thirds of their — 90% of their work time was getting to or from an airport. I think we’re getting more production per hour — because of that dramatically because of where people are and actually we are getting less expenses, so it’s a pretty interesting what’s going on right now”
A lot less travels, restaurants, entertaining and better productivity, even maybe reduced office expenses immediately benefit the P&L, particularly if you are not a service company. How sustainable?
As this Ed Yardeni chart illustrates, corporate America’s profit margins (blue line) have been in a steep slide since 2013. S&P 500 margins clearly benefitted from the tax reform but large companies’ margins were also coming down pre-pandemic (my red dots are Q3 and Q4 2020 margins per Refinitiv data).
The squeeze on margins from rising labor compensation continued in Q3. Additional costs associated with health and supply chains issues plus potential tax hikes make it difficult to blindly accept analysts’ current forecast for 2021 margins reaching 11.6% (black dot above).
In fact, this other Ed Yardeni chart demonstrates analysts’ tendency to generally overestimate profit margins. The problem this time is that the pandemic has compelled most companies to radically change many business practices (e.g. remote work, online ordering) and quickly implement new technologies, some of which may reduce costs, some of which will increase costs (e.g. delivery, cloud, security). Many companies are also in the midst of changing their supply lines in Asia. Only time will tell the overall net impact on profitability.
Using actual trailing EPS, the Rule of 20 P/E is 25.2, still in “Extreme Risk” area.
If we attempt to normalize earnings trying to look through the pandemic, the Rule of 20 P/E drops to 21.5 using the 2021 EPS estimate of $167 (at this morning’s pre-op of 3307). On that possibly optimistic number, the S&P 500 becomes “only” 7.5% overvalued, which would not justify the current 100% cash allocation from the Rule of 20 Strategy which is based only on actual trailing numbers.
Back in March 2009, I discarded trailing EPS in favor of normalized profits to justify buying equities. But that was (1) after it was clear the financial crisis had passed and (2) when normalized profits gave a clearly, deeply undervalued equity market. We are not there yet.
The Rule of 20 Fair Value (yellow line), the level at which the R20 P/E would be 20, is at 2543 and is still falling. Using $167 for profits, Fair Value becomes 3050.
TECHNICALS WATCH
My favorite technical analysis firm sounds shakier than normal, prudent short-term but still “constructive” medium term thanks to absent negative divergences in breadth and momentum and decent behavior from smaller cap equities.
Friday, the S&P 500 Index closed below its 100dma, unlike Nasdaq, the S&P 600 and the Russell MidCap index. While one could find comfort sitting on those technical supports, note that the latter two indices are showing flattening (MidCap) and declining (SmallCap) 100dma lines and still declining 200dmas. Not my kind of comfort.
DIVIDEND STOCKS
Last week, I briefly discussed valuation per segments: growth vs value vs dividend stocks. If you are wondering why some high dividend yielding stocks keep sliding amid such low interest rates, SentimenTrader has an explanation for you:
ETF investors leave dividend stocks in favor of momentum
Despite the assumption that investors are starved for yield and will invest in anything with a pulse, that’s hard to prove given how investors are allocating their money. (…)
Flows into momentum strategies has far outpaced that of dividend strategies. Since April, an average of $788 million per month has flowed out of dividend ETFs while an average of $263 million per month has flowed into momentum.
This kind of outflow rivals that of stretches in 2015 and 2017 when dividend ETFs trailed momentum. Soon after these big outflows, the tide turned more toward dividend stocks.
We can go back further on a quarterly basis and see the same pattern over the past 15 years.
Once again, recent quarters rival the most extreme on record. Other times when there was a flow away from dividend stocks and toward momentum, it was after those dividend stocks showed relative underperformance. And in the quarters ahead, they reasserted themselves relative to momentum.
(…) Exxon’s cash flow has all but evaporated, Woods’s aggressive rebuilding plan has ground to a halt, and criticism is growing over the company’s climate strategy. The most immediate question for investors is how long the $15 billion a year in dividends survive. (…) Exxon cut $10 billion in capital spending in April and said Friday that 2021 spending will fall as much as another $7 billion. (…)
Covid-19 Burden Falls Heavily on Middle-Aged Men With men in middle age dying disproportionately of Covid-19, scientists are looking for reasons not only in the underlying health risks, but also in biological and external factors.
(…) Overall, however, men make up about 54% of U.S. deaths, and a significantly higher portion in middle age. The death-certificate data through late October show men make up nearly 66% of more than 42,000 Covid-19 deaths occurring among people between their mid-30s and mid-60s.
In Europe, the European Center for Disease Prevention and Control says men represent 73% of deaths of those from 40 to 69 years old. Data there also show men are 62% of the hospitalized population aged 40 to 69, and nearly three-quarters of the sickest patients in that age bracket.
More broadly, a global database effort spanning 183 countries called the Sex, Gender and Covid-19 Project based at University College London found about 11 known Covid-19 cases among males for every 10 cases among females, and 14 male deaths for every 10 female deaths. (…)
Doctors Begin to Crack Covid’s Mysterious Long-Term Effects Severe fatigue, memory lapses, heart problems and other complications are plaguing patients who weren’t that badly hit initially. “It’s been so long already, it’s kind of daunting.”
For many patients, including young ones who never required hospitalization, Covid-19 has a devastating second act.
Many are dealing with symptoms weeks or months after they were expected to recover, often with puzzling new complications that can affect the entire body—severe fatigue, cognitive issues and memory lapses, digestive problems, erratic heart rates, headaches, dizziness, fluctuating blood pressure, even hair loss.
What is surprising to doctors is that many such cases involve people whose original cases weren’t the most serious, undermining the assumption that patients with mild Covid-19 recover within two weeks. (…)
For many such patients, she said, “the disease itself is not that bad,” but symptoms like memory lapses and rapid heart rate sometimes persist for months. (…)
“I haven’t really seen any other illness that affects so many different organ systems in as many different ways as Covid does,” said Zijian Chen, medical director for Mount Sinai Health System’s Center for Post-Covid Care. (…)
A leading explanation for long-Covid symptoms is that immune-system activity and ensuing inflammation continue to affect organs or the nervous system even after the virus is gone, researchers said. (…) Another possibility is that the virus causes some people’s immune systems to attack and damage their own organs and tissues, researchers said. (…)
It still isn’t known whether the new coronavirus gets into the brain itself, or if Covid-19’s neurological symptoms stem from a body-wide inflammatory response, scientists say. (…)
Better not to catch it…simple as that.
(…) The strategies pursued by South Korea, Vietnam, China and others do still seem to be paying off. While the total Covid-19 death toll is between 500-700 per million people in France, the U.K., Spain and the U.S., in China and South Korea it is below 10 per million. Cases are a less perfect measure, but there’s a similar observable gap. Wuhan, once the epicenter of Covid-19, is welcoming tourists again. (…)
If the key to avoiding more lockdowns is finding a way to “live with the virus” — through widespread testing, tracing of contacts and isolating positive cases to slow transmission — Western countries have made structural, not cultural, errors. (…)
South Korea tested early, and often, using walk-in centers and drive-throughs. In Wuhan, the authorities tested 11 million people over 2 weeks. The share of tests coming back positive in South Korea and Vietnam is below 1%; in France and Spain it has risen to 10%.
While contact-tracing strategies such as Vietnam’s “third-degree” sweep of personal data — or Hong Kong’s geofencing wristbands — would spook the average Londoner, Europeans failed to implement their own alternatives properly. Between July and August, for example, the number of contacts traced per positive case in France fell to 2.4 from 4.5. If test-and-trace slackens off like this, no wonder we can’t control the virus’s spread.
As for the quarantining of positive cases, the decision by China and South Korea to monitor — or imprison, some might grumble — patients with milder cases in special-care centers is worth considering. Keeping people cooped up at home doesn’t seem that much more liberal, especially when people are tempted outside by the need to earn a living. It’s also far less effective, with one study estimating that isolation in institutions could avert almost three times as many cases as home-based isolation throughout an epidemic. (…)
Over the past 20 years, Asia has been hit with several epidemics, such as SARS in 2003 and MERS in 2015, which forced countries to adapt and improve their institutions. This also spurred countries to invest in public health: Between 2000 and 2016, Vietnam’s per-capita health spending increased by an average of 9% per year. By contrast, European countries have been shutting hospitals and beds, with financial crises more front of mind than disease.
As Europeans start their winter lockdown, they should remember that improvements are achievable. And the good news is that countries are collaborating more at the EU level, on efforts such as rolling out quicker antigen tests and sharing resources. If Asia managed to learn from past pandemics, the West should be able to as well.
Decades-long blue tide?
Young voters, projected to turn out overwhelmingly for Joe Biden, could provide a huge advantage for Democrats not just this in this election but for decades to come, Axios’ Stef Kight and executive editor Sara Kehaulani Goo write.
Reproduced from Center for American Progress. Chart: Axios Visuals
Pollsters and political scientists are poring over new reports by the Harvard Institute of Politics and the liberal Center for American Progress that examine the growing enthusiasm among the nation’s youngest voters.
- The Harvard poll finds that 63% of 18- to 29-year olds “definitely” plan to vote. Their enthusiasm for Biden grew even stronger since September.
- The CAP models forecast a huge advantage for Democrats in future elections, based on demographics and voting patterns of today’s youngest generations — even taking account of trends that show that Americans tend to become more conservative as they age.
- Electoral College models, which factor in changing state demographics of these young voters, look even more ominous for Republicans.
Millennials and Generation Z are much more liberal than their predecessors, and voted for Democrats in previous election cycles. Voting research shows that the president you vote for as you come of age to vote often determines which party you’ll stick with, too.
- Millennial (born 1981 to 1996) and Generation Z (born 1997 onward) voters combined are estimated to represent 37% of eligible voters this year — larger than Baby Boomers (28%) and Generation X (24%).
- By 2036, those two generations will make up 60% of the electorate.
Reality check: The election-upending impact of younger voters has been predicted for decades and has yet to come to pass.
- The unknown is whether Democrats — in particular Biden and vice presidential candidate Kamala Harris — will continue to engage these youngest voters. Share this Axios story.
