The Beginning of the End
/Oh what a difference a year makes. For a moment, and I know it’s scary, transport yourself back to where you were 365 days ago. The S&P 500 was down about 20% in the month of March, 2020. We had witnessed the Dow Jones fall almost 3000 points in a single day, panic and uncertainty was pretty much the only thing we had to hold on to. It was just a bit before this time when our firm released our first COVID - 19 related commentary.
We, much like most of America, were scrambling to put together the facts. News was moving fast, headlines seemed to contradict each other, and everyone was seemingly hopelessly trying to figure out what was best for them and their family.
The next 12 months proceeded to hit the country hard. We lost friends, family members, and neighbors. The mourning process was very real and very hard on everybody. Mourning and pain, however, is temporary; it comes and goes. COVID - 19 has, unfortunately, instilled in many people a perma-down (this is a term I made up for people who seem to be permanently down because of the pandemic quarantines). Fast forward to today, 365 days later, and I am here to say that I think this is the beginning of the end.
It is certain that this pandemic has stretched farther and longer than probably any of us had originally anticipated. Remember “15 days to flatten the curve”? It seems the coverage of the pandemic has shifted from focusing on how to emerge from it to lingering on what is a seemingly never ending problem like the movie Groundhogs Day. I believe that at this point it is important to set the narratives aside and to take a sober look at the actual data.
It was the math that brought us into it and it should be the math that brings us out of it. At the beginning of the pandemic we were watching daily infection numbers, deaths, and rolling averages. Every major news network dedicated a portion of their screen for a “real time case count.” We were looking at the numbers as indicators to drive our decisions.
However, after a while, it seemed we no longer were applying logic when looking at the numbers, rather we were relying on other factors to make our decisions. We fell into this rut where we essentially just accepted that COVID - 19 was “here” with no plans of leaving anytime soon. But, when we return to the very fundamentals that we so closely monitored at the emergence of this pandemic the numbers tell a much different story.
If you go looking, some of the data (CDC.gov) is appearing very positive:
New positive tests have plummeted 73%
COVID - 19 deaths have declined by 54%
New Hospitalizations are down 71%
Nursing home positive cases are down 95%
COVID - 19 patients occupy only 12.2% of ICU beds
These are the metrics we were all watching so closely at the beginning of the outbreak. Remarkably, the narrative has continued to stay very bleak despite the numbers very much improving. I do not claim to be a doctor, an epidemiologist, or anything of that sort. I am simply showing the numbers associated with the outbreak and observing just how much they have improved.
Herd immunity is the term experts have been throwing around as the inflection point to where we could, in theory, re open the economy. As of this writing, about 150 million people have received the full vaccine. If you factor in those who are fully vaccinated, the people who have received at least 1 shot of the vaccine, and the people who have gotten and recovered from COVID - 19, we are RAPIDLY approaching herd immunity. The main caveat on this is if a new strain were to emerge that proved as, or more, dangerous and that the current vaccines were ineffective against.
Our knowledge of the virus is not even comparable to where it was at the emergence. We now know who is vulnerable, who we need to protect, and who is statistically very capable of defeating a COVID - 19 infection. I want the main takeaway of this post to be that we seem to be on the other side of this. Despite what your local leaders, social media, cousins, neighbor, whatever, may say…the data is looking good. It is because of this good data perhaps that we are seeing some inflection points in high frequency data points. Some remarkable ones include
Initial jobless claims are down 88% year over year
Box office receipts are up 400,589% year over year (not a typo)
Rail car traffic is up 16% year over year
People passing through TSA Checkpoints are up 712% year over year
OpenTable Restaurant reservations are up 30% month over month
Hotel Occupancy is up 10.8% month over month
Beware of the perma-down. The narrative around COVID - 19 has changed countless times since the outbreak of the pandemic that many individuals have just accepted as a permanent factor in our lives. Let this data show you that it is improving. If current trends continue on this pace it is safe to say we may soon have this behind us. Hang in there, better times are around the corner.
Sources: First Trust Advisors, Department of Labor, Redbook Research, Box Office Mojo, Association of American Railroads, American Iron and Steel Institute, Hotel News Now, Opentable, Transportation Security Administration, Energy Information Administration. CDC.gov
