Reasons to Be Positive About the US Coronavirus Fight
Less than a month ago markets were at a record high, as healthy data on the US economy signaled continued growth on the horizon. Then, as Coronavirus made its way to continental Europe and the United States, markets went into a tailspin, suffering one of the fastest declines on record. The last several weeks have been characterized by extreme volatility as investors try to make heads or tails of the situation. Coverage around the virus has been almost exclusively negative, as experts extrapolate worst case scenarios to spur action. It should come as little surprise then, that fear of a recession has moved to the forefront of many minds. At times like these, we think it's crucial to look at the data and note some positive developments that aren't getting as much media coverage.
A Wave of Recoveries on the Horizon: The number of official infections in the United States has continued to rise at an accelerated pace over recent weeks. Meanwhile, our preferred measure of active cases (total cases minus deaths and recoveries, which gives a better picture of the number of people who are able to spread the virus further) has continued to rise consistently as well. As so often occurs during virus outbreaks, fears arise that the early pace of spread will continue, unabated, at an exponential rate. History – including the experiences of both China and South Korea with Coronavirus – shows identification and treatment leads to a slowdown in the pace of new cases, and a pickup in recoveries. Typically, it takes roughly two weeks for otherwise healthy individuals who test positive to get better and be officially moved from the "active" to the "recovered" counts. Now that we are about two weeks out from the initial surge in US cases, recoveries should begin to rise consistently. The world recovery rate currently sits at 93% right now, while in the US it is only 43%. We expect the US to move toward and then exceed the world recovery rate in the weeks ahead.