THE DAILY EDGE: 15 APRIL 2020

Virus Update

Virus Death Toll Likely Far Higher Than First Reported Discrepancies risk making it harder to judge when outbreak has peaked and when restrictions can be eased

Newly published figures show deaths linked to the new coronavirus in the U.K. have far exceeded preliminary estimates, adding to a growing body of evidence across Europe that closely watched daily death tallies don’t reveal the virus’s true toll.

Behind the discrepancy are lags in recording some deaths that can stretch to a week or more, as well as deaths in nursing homes and other non-hospital settings that aren’t normally captured by rapid-fire estimates used to track the pandemic. (…)

Some fatalities can take weeks to be recorded in a nationwide database, the CDC says.

New York City on Tuesday added nearly 3,800 people to its estimate of Covid-19-linked deaths to total more than 10,000, including people who were presumed to have had the virus but weren’t tested for it before death. (…) The discrepancy in the British data suggesting deaths were more than 50% higher than first estimated reflects what exactly is being counted. (…)

In the Spanish capital of Madrid, 4,260 residents of nursing homes died after showing symptoms of Covid-19 in the 30 days through April 8. But only 781 had been tested and confirmed to have the infection, the vice president of the regional government of Madrid said last week. (…)

For Italy, the analysis showed that the death toll for Bergamo in March and for Brescia since the epidemic started in late February until the end of March is probably at least double, according to interviews with local officials, doctors and funeral-service providers, and comparisons with the numbers of deaths from past years. (…)

Covid-19 twice as contagious as previously thought, study finds

Epidemiologists had previously estimated that each person with Covid-19, the disease caused by the virus, infected two to three people on average, based on early cases in the city of Wuhan. The new estimation by Los Alamos National Laboratory in New Mexico is that those who carried the coronavirus in Wuhan were passing it on to 5.7 people on average. (…)

They found that instead of taking six to seven days for the number of infected people to double, as was previously thought, it took only 2.3 to 3.3 days to do so.

Based on their newly estimated intensity of the initial outbreak, the research team said that achieving so-called herd immunity would need at least 82 per cent of people to be immune (by infection or vaccination) to stop the contagion spreading in a population – not about 60 per cent, as previous research suggested. (…)

The authors of the new Los Alamos study added that a higher level of infectiousness meant that if asymptomatic carriers accounted for a substantial proportion of transmission, then quarantine and tracing of contacts of those showing symptoms would not be enough to halt the virus’ spread. (…)

• Spain reported the biggest increase in the number of confirmed cases in six days on Wednesday, while the daily death toll declined. There were more than 5,000 new infections in the 24 hours through Wednesday, taking the total to 177,633, according to Health Ministry data.
• Germany is set to agree on an extension of nationwide lockdown measures until at least May 3 as the government debates with regional leaders on how to gradually relaxing restrictions on public life in the coming weeks. The number of new cases in Germany fell for a sixth day on Wednesday. There were 2,138 new infections, the lowest increase this month, bringing the total to 132,210, according to figures from Johns Hopkins University.
• Austria will carry out a second round of random tests to get a clearer picture of total infections, after a first study in early April concluded there were about 28,500 cases in the country, more than triple the official number at the time.
• China for the first time publicized a breakdown of people testing positive for the coronavirus without outward signs of being sick, revealing that those among them who remain symptom-free throughout infection are in the majority.
  Among 6,764 people who tested positive for infection without showing symptoms, only one fifth of them — 1,297 — have so far developed symptoms and been re-classified as confirmed cases, China’s National Health Commission spokesman Mi Feng said at a briefing in Beijing Wednesday.
• The Associated Press earlier reported that it obtained internal documents showing Chinese officials waited six days in January before President Xi Jinping warned the public of the dangers of the outbreak. The delay allowed millions of people to travel from the epicenter in Wuhan to elsewhere in the country and the world, the report said.
• A group of Harvard disease researchers wrote in the journal Science that people around the world might need to practice some level of social distancing intermittently through 2022, Bloomberg reports.
• Hydroxychloroquine, the 65-year-old malaria drug that President Donald Trump has praised, appeared not to help patients get rid of the pathogen in a small study. The pill didn’t help patients clear the virus better than standard care and was much more likely to cause side effects, according to a study of 150 hospitalized patients by doctors at 16 centers in China. The research, which hasn’t been peer-reviewed, was released Tuesday.
• FAA’s Medical Experts Warn of Potential Hazards of Anti-Virus Drugs Touted by Trump U.S. air-safety regulators have emphasized the potentially serious side effects from two medications touted by President Trump as potential treatments for the novel coronavirus.

PANDENOMICS

• How much will the coronavirus pandemic cost the world economy in terms of lost output? About $9 trillion according to the International Monetary Fund. The economic damage would be even larger if the IMF’s assumption of the pandemic fading out in the second half of 2020 proves too optimistic. Global real GDP is now expected to contract 3% this year, the biggest annual slump since the Great Depression, while trade is estimated to fall 11%. While there’s little doubt about the ongoing economic downturn, the latter’s amplitude is unclear. That’s reflected in the IMF’s use of the word “uncertainty” 11 times in WEO’s first chapter alone. (…) The IMF’s emphasis on downside risks makes even more sense when looking at its separately-released Global Financial Stability Report which points to a string of potential second round effects due to financial market stress. If anything, the IMF’s message this morning is one of utmost caution with regards to not just this year’s economic outlook but for 2021 as well. (NBF)
• Employment in the US has fallen dramatically, with new jobless claims totaling almost 17mn over the last 3 weeks. We expect an additional 5.5mn claims this week and about 15mn more through the end of May, for a total of about 37mn from March-May. (GS)

• San Francisco Fed Chief Casts Doubt on V-Shaped Recovery Federal Reserve Bank of San Francisco President Mary Daly said the path of recovery out of the coronavirus crisis is unlikely to be swift, even if the threat of illness is contained quickly.

“(…) I expect something more like negative quarters of growth throughout 2020, and then a gradual return to positive growth in 2021,” Ms. Daly said in an interview with The Wall Street Journal on Tuesday. Even then, she added, that view is entirely dependent on how the health crisis plays out. (…)

• US holds off on IMF plan to boost emerging economies’ finances

Oil Demand Projected to Fall by Record Amount Global oil demand is expected to fall by a record 9.3 million barrels a day this year as government-implemented lockdowns keep the economy at a near standstill, the International Energy Agency said.

In its closely observed monthly oil-market report, the IEA projected that demand for crude would drop in April by 29 million barrels a day to levels not seen in a quarter of a century. That would equate to roughly 29% of the world’s 100-million-barrel daily oil-demand figure from 2019. (…) Even after April, the Paris-based organization expects demand to be 26 million and 15 million barrels a day lower in May and June than a year earlier. (…) The agency said it expects a 4.8% fall in global economic growth this year. (…)

The IEA forecasts that the agreement will contribute to a record 12-million-barrel-a-day drop in global oil supply in May. (…)

With an estimated 1.2 billion barrels of storage available at the end of January, the IEA forecasts that global stocks could increase by 11.9 million barrels a day in the second quarter, hitting “operational capacity” limits by the middle of the year. (…)

• Goldman Sachs: “combined commercial and government storage fill capacity would become saturated in April, requiring c.4 mb/d of production shut-ins even before the OPEC+ deal starts. We therefore reiterate our view that the level of voluntary cuts and government purchases remain too little and too late to balance the market, leading to further downside to inland crude prices like WTI into the May expiration.”

Big Banks’ Profits Plunge as Losses on Loans Loom JPMorgan Chase and Wells Fargo set aside billions to get ready for a flood of customers to default on their loans as the pandemic pummels the economy.

(…) JPMorgan set aside an additional $6.8 billion in the quarter for potentially bad loans, largely in its consumer bank. That raised its total provision to $8.29 billion, more than the bank has had to take since 2010. But even that may not be enough, the bank warned.

The bank said the provision was based, in part, on the assumption that U.S. gross domestic product would fall an annualized 25% and unemployment would rise to more than 10% in the second quarter. But JPMorgan economists have recently amended their forecast to a 40% decline in GDP in the quarter and a 20% unemployment rate.

(…) banks and other lenders are starting to toughen their loan-approval standards, particularly for new customers. That means many people could find it hard to get credit just when they most need it. (…)

At yesterday’s 2849 high: R20 P/E = 19.87