Markets Flash Fear as COVID-19 Approaches Pandemic Status

COVID-19 Update: Spread, Testing and Possible Outcomes

Healthcare Policy Analyst Chris Meekins and Washington Policy Analyst Ed Mills provide an update on the coronavirus outbreak.

The virus continues to spread across the nation and around the world. States continue to see steady increases in cases, but hospitalizations and deaths are starting to show some positive signs in New York City. Nearly one in four identified cases globally are located in the U.S., though the U.S. continues to trail Italy and Spain in identified deaths. All data below is as of April 5, 2020, at 4 p.m. ET.

U.S. cases: 325,185

Global cases: 1,252,265

U.S. deaths: 9,267

Global deaths: 68,148

Lockdown: More than 90% of Americans (over 295 million) now live in states with stay-at-home orders. This is a notable increase after Florida joined most of the other states this week. While it is not the formal national two-week “timeout” we have been saying was necessary, it’s close. States not engaging tend to be less populated.

Testing: The U.S. testing capacity has leveled off to around 100,000 new tests completed each day. One area of concern is that despite the CARES Act requiring those completing tests to report the results to the government, the government only has around half the results of the more than 1.6 million tests completed. The assumption is that entities are only reporting positive not negative results. Testing for antibodies is now becoming a greater focus; however, it will likely be more than a month before that becomes widely available.

Four scenarios update

A few weeks ago, we outlined four scenarios we believed could be used as a framework for how the virus’ spread could stop. The time to implement scenario 1 has passed, so that scenario is no longer possible. The likelihood of the other scenarios therefore increases accordingly. We are making some small changes to scenarios 2 and 3 to take into account the possibility that widespread testing and treatments could become available.

Scenario 1: “Stop everything now”

As a reminder, under this scenario the U.S. economy basically shuts down all nonessential activities for two weeks starting the beginning of last week. At the same time, testing dramatically increases so an accurate baseline of how many people are infected becomes available. We see a notable increase in cases, but those cases are before the de facto shutdown has occurred. By the end of the two-week period, cases dramatically slow and nearly all individuals with the virus are identified in the U.S. This allows the U.S. to slowly begin reopening activities with active monitoring in areas where community spread has subsided. The number of infections stays below 500,000 and we will have turned the corner by late April.

Probability: 0% – the government missed the opportunity for this scenario.

Scenario 2: “Procrastinator” or “eventually we get it”

Under this scenario, areas impacted by community spread will shut down after dragging their feet a bit, but they fail to preemptively act before the spread breaks out in their areas. The public largely ignores warnings (how busy were farmers markets recently?) until the death rate ticks up (likely within the next 10 days) and then the public accepts the meaningful action that is necessary. At that moment, all activities from the “stop everything now” scenario are triggered. The number of infections stays below 1,000,000 and we will have turned the corner by Memorial Day.

Change: We are updating this scenario to include the possibility that even if a national two-week shutdown does not occur, we could still turn the corner by Memorial Day if testing is available for all who want it AND an effective and widely available treatment is found.

Probability: 40%

Scenario 3: “Saved by summer”

Under this scenario, federal, state and local leaders fail to limit the spread in a meaningful way. The American public do not appreciate the threat and fail to take actions to prevent spread. The virus doubles every week. The sole saving factor is that, for reasons we cannot yet point to scientifically, the virus’ reproduction rate slows in the summer. That gives government entities time to catch up and the public time to take real action that it failed to initially take. In this scenario, infections will surpass 1,000,000 and we will have turned the corner by July 4.

Change: We are updating this scenario to add that in addition to summer potentially slowing the spread, it is possible testing will become more widely available and a treatment could be identified.

Probability: 40%

Scenario 4: “Failure IS an option”

Under this scenario, summer does not result in a natural buffer, governments at all levels fail to take action and the public decides the threat is not significant. The number of infections exceeds 150,000,000 with likely 1,000,000 deaths over multiple years. We are still dealing with this on Labor Day.

Probability: 20% – this probability creeps up with each day that goes by without significant government actions.

Source: Raymond James research

All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur.