COVID-19 Growth Rate Slows for 5 Straight Weeks

Published May 4, 2020

After peaking the week of March 27th, the growth rate in cases and fatalities has now fallen for 5 straight weeks with the case growth slowing from 27% to 20% and fatality growth slowing from 38% to 21%.

Weekly Growth in Global COVID-19 Cases and Deaths

The data for both new cases and deaths on a worldwide and USA basis is shown below and is clearly slowing.

Daily COVID-19 Related Cases and Deaths

Source: Worldometers

USA Daily COVID-19 Related Cases and Deaths

Source: Worldometers

In terms of the statistics by country:

  • Worldwide the # of cases hit 3.M with 239K deaths. Worldwide, 7% of those who have gotten COVID-19 have died, 32% recovered and 61% are still active.
  • The US is accounting for over 33% of cases and 27% of fatalities at 1.1M cases and 66K deaths. 14% of US COVID-19 patients have recovered, 6% have died.
  • Brazil, Russia and Singapore had the fastest growth in cases at 79%, 67% and 42% respectively while most other countries are below 25%.
  • Russia, Brazil, Canada and the UK had the fastest increase in deaths at 90%, 86%, 48% and 41% respectively with most other countries below 30%.
  • The focus has shifted to re-opening each countries economies, when and how to initiate this.
  • As shown in the chart from the New York Times, there are significant differences across the US in regard to this process with 18 states partially open, 7 states to re-open soon and 26 states still shut down. There are also significant variations within each state as in California where beaches are closed in certain cities and not in others. Some states are proceeding to re-open their economies despite a decline in cases. It is very concerning.

COVID-19 Cases, Deaths and Recovery and Testing Rates for Select Countries

Source: Worldometers, compiled by DSCC
  • The latest US economic data included:
    • Weekly initial jobless claims remained at elevated levels at 3.84M which was 10% higher than consensus. Over 30M jobs have been lost over the past 6 weeks accounting for around 18.6% of the US work force.
    • Weekly continuing jobless claims reached a new all-time high of 18M for the week ending April 18th which was published on April 30th.
    • US real GDP fell at an annual rate of 4.8% in Q1’20, the largest drop since late 2009. Since the economy was doing just fine through February, this drop signals a dramatic decline in March. Economists are suggesting Q2’20 may decline as much as 30%, well beyond the worst quarter since the winddown from WWII which was in 1958 down -10% resulting from the Asian flu. In Q1’20, consumer spending was down at a 10.2% annual rate. Total trade was down 12.6% with imports falling faster than exports. Inventories fell slower than expected meaning a larger adjustment may occur in Q2’20. Inflation was up at an annual rate of 1.3%, but will likely decline in Q2’20 on lower commodity prices.
    • The ISM Manufacturing Index fell to 41.5% in April, the lowest result since early 2009. It was above the consensus of 36 however. The decline was broad-based with 15 of the 18 industries down. The 2 industries that grew were paper products and food/beverage/tobacco. New orders fell to 27.1, the lowest since December of 2008. The production index fell from 47.7 in March to 27.5 in April on plant closures, lack of new orders and labor. The employment index fell to 27.5 the 2nd lowest reading on record after June of 1949.
    • Personal consumption expenditures fell 2% in March with consumer spending down 7.5%, the largest monthly decline since the late 1950s.
      • Services fell 9.5% with:
        • Movie admissions down 62%
        • Air transportation down 53.5%;
        • Hotels down 51;
        • Casino gambling down 45%;
        • Restaurants down 23%
        • Barbers/hair salons down 23%
        • Laundry/dry cleaners down 23%.
      • In terms of goods:
        • Food and groceries up +20%
        • Household cleaners up 12%
        • Gas down 15%
        • Alcohol up 16.5%
        • Cars and car parts down 26.5%;
        • Apparel down 30%
      • There was a 149% increase in unemployment insurance payments
      • Core prices were down 0.1%
  • First Trust offered some interesting weekly data which showed dramatic reductions in:
    • Movie tickets
    • Hotel occupancy
    • Hotel revenues per room
    • TSA checkpoint data
    • Gas supply
    • Etc.

US Weekly Initial Jobless Claims

US Weekly Continuing Jobless Claims

First Trust’s US Weekly Data

Source: First Trust

US policy updates included:

  • The Fed met last week and made it clear that it will continue to be aggressive until the US economy is back on its feet. This includes:
    • Keeping short term interest rates near 0. Economists speculate interest rates won’t raise for a couple of years, maybe till 2024. After the 2008-2009 recession, rates didn’t rise till 2015.
    • Continuing to expand its balance sheet with purchases of Treasury debt and commercial and residential mortgage-backed securities as well as other measures to maintain liquidity and credit for households, state governments and local governments.
    • The Fed said it would start use its $600B Main Street Lending Facility which provides loans to medium and large businesses. It announced it will also provide loans to companies with relatively high debt burdens, up to 6X last year’s EBITDA. Large companies with $5B in annual revenue can borrow up to $2.5B. The interest rate will be 3 percentage points above Libor.

European economic data included:

  • Eurozone GDP fell 3.8% in Q1’20, their largest drop since these statistics became available in the mid 1990s.
  • Unemployment rose from 7.3% in February to 7.4% in March.

The European Central Bank (ECB) announced a few new measures after already announcing 750B euros in bond purchase. The new measures include:

  • Reducing the interest rate on cheap loans it is providing to banks;
  • Eased requirements for bank capital requirements and loosening collateral requirements;

China economic data included:

  • Its manufacturing PMI fell from 50.1 in March to 49.4 in April on weakening global demand from COVID-19;
  • Its non-manufacturing PMI rose from 52.3 in March to 53.2 in April as the lockdown measures eased;

In terms of display-related stock performance, see the latest issue of the DSCC Weekly.

Image Description
Written by

Ross Young