Dr. Anthony Fauci, head of the NIAID
The Markets
Stocks rose yesterday, as investors digested positive news from Gilead over the results of a trial of its coronavirus treatment candidate remdesivir. The news was a welcome counter to a gloomy report about the state of the US economy.
The Dow Jones Industrial Average rose 532 points, or 2.2%, while the S&P 500 Index gained 76 points, or 2.7%. Both indices are now up about 35% from their most recent lows (in March), but are still down about 16% from their all-time highs.
The Economy
More grim news this morning about state of the US economy. A report released today showed that 3.8 million Americans filed for first-time unemployment benefits this week, bringing the total to over 30 million in the past six weeks. The unemployment rate is now estimated to be between 17% and 20%. The official rate will be released next week with the Labor Department’s employment report for April. The coronavirus outbreak and subsequent recession have erased all of the jobs created since the 2008-09 financial crisis.
During the first quarter, consumer spending declined by 7.6%, the most since 1980. It’s an important statistic, because consumer spending accounts for about 70% of American GDP.
The services sector fell by the largest margin in history, due primarily to one industry – health care. The pandemic has required health care providers to limit profitable activities like elective procedures and routine visits. At the same time, costs for extra equipment like PPE have risen dramatically. The combination has led to mass layoffs. According to the Bureau of Labor Statistics, 43,000 health care jobs were lost in March. Nearly half of all medical practices have temporarily furloughed staff, while 22% have laid employees off permanently, according to one survey.
Even as the toll of the pandemic on America’s economy and its workers mounts, there are reports that as many as 50 million Americans have yet to receive their $1,200 stimulus checks, announced at the end of March as part of the $2 trillion CARES Act.
Public Health
Roughly 118 million Americans, or more than 33% of the country’s population, live in states that have either eased restrictions on non-essential businesses, or plan to do soon. You can track where your state stands here.
To comply with public health measures, restaurants will need to cap capacity and maintain distance between tables. Masks are required nearly everywhere.
As states move ahead with plans to reopen their economies, President Trump indicated that he would not extend federal distancing guidelines, which expire today.
Dr. Anthony Fauci, part of the White House Coronavirus Task Force and the head of the NIAID, has warned that the rapid reopening of the economy risks a second wave of the virus, which could be far worse than the initial outbreak. He has repeatedly stressed that that states must have the capability of identifying, isolating and contact tracing people who test positive.
And as Fauci and other public health experts and scientists continue to emphasize the need for broad-based testing to combat the virus, as part of a comprehensive “Testing, Tracing and Treatment” protocol, the Administration is downplaying the need for a more expansive testing regime.
Success Stories
There is some good news out there.
South Korea, once one of the countries hardest hit by the virus, reported today that it had no new domestic cases for the first time since the end of February. Australia and New Zealand are likely to announce similar success soon.
In a federal drug trial, remdesivir, originally by Gilead developed to treat Ebola, appears to shorten the time to recovery by over 30%, from 5 days to 11 days. The drug blocks an enzyme that the virus needs to replicate. It also appears to have minimal side effects. Dr. Fauci thinks the drug could set a “new standard of care” for coronavirus treatment. While the drug is not a cure, it does show that a drug can block the virus.
Keep the faith, be safe and stay healthy.
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