New coronavirus variants appear more transmissible and possibly more deadly
The Democrat-controlled House of Representatives is expected to send impeachment papers to the Senate today. Meanwhile, Republicans seem split over the constitutionality of impeaching a president no longer in office. The Biden administration is focused on moving forward the confirmation of more of its cabinet nominees.
The Dow Jones Industrial Average closed last Friday at 30,997, up very slightly for the week. The broader S&P 500 index similarly closed the week up slightly, at 3,841. The tech-heavy Nasdaq was the best performer for the week, closing up about 350 points at 13,543.
The yield on the 10-year Treasury Note was 1.06%. Yields have leveled off in recent days after having moved up markedly post-election.
Globally, across 192 countries and territories, there have been over 99 million confirmed cases and over 2.1 million deaths. In the United States, over 25 million have been infected and nearly 420,000 have died.
The number of new cases of COVID-19 per day has finally dropped below the 200,000 level. The chart below from Johns Hopkins University visually shows the decline in recent days:
The positive test rate has fortunately fallen in recent weeks, but it is still much higher than it was in the spring and summer, and too high for the reproduction rate to decline meaningfully in the short-term.
Source: Johns Hopkins University https://coronavirus.jhu.edu/testing/individual-states
The hospitalization rate has declined slightly over the past few weeks. However, public health officials are concerned that more contagious variants of the virus will lead to greater spread, which in turn leads invariably to more infections, more hospitalizations and more deaths.
For the time being it appears that the daily death toll from the virus has leveled off. But, the 7-day average is still nearly 3,100 lives lost. In other words, a “9/11” a day, every day, week after week.
The Institute for Health Metrics and Evaluation (IHME) at the University of Washington projects that a total of between 547,000 and 621,000 Americans will die from the virus by May 1, 2021. The variability in the numbers is based on the widespread adoption of facemasks, vaccinations, and other mitigation tactics.
The chart below from the COVID Tracking Project is a summary of the US data since April 1, 2020:
As the virus mutates, public health experts are concerned that the vaccines already developed may not provide protection against the new strains.
Moderna, though, has announced that its vaccine appears to trigger an immune response against the recently discovered variants of the virus first detected in Britain and South Africa. But, while the vaccine generated disease-fighting antibodies that worked against the South African variant, its efficacy was reduced. As a result, the company has designed a new potential vaccine that could be added on to the current two-dose regimen.
Laboratories around the world are studying whether vaccines and treatments, particularly monoclonal antibodies, can be as effective against the new variants. So far, the tests largely rely on one part of the multifaceted immune response, and researchers have found evidence the vaccines are likely to be effective. But, those tests have also identified the need to track changes in the virus and prepare for the eventuality that, like flu shots, a coronavirus vaccine might need to be updated and administered on a regular basis.
The chart below shows the relative success – or failure – of a select group of developed nations in getting “short in arms”.
The Labor Market
The number of Americans filing for unemployment benefits declined to 900,000 in the week ended January 16th, from the previous week’s five-month high of 926,000. Claims remain well above pre-pandemic levels and will likely remain elevated for some time, in line with number of COVID-19 infections. In addition, about 424,000 people applied for help from the Pandemic Unemployment Assistance scheme, which covers workers that do not qualify for initial claims, compared with 285,000 in the previous period.
The cornerstone of the Biden administration’s economic recovery plan is a proposed $1.9 trillion pandemic relief package that includes measures such as $1,400 stimulus checks, vaccine distribution funding and a $15 minimum wage.
A group of Democrats and Republicans are asking whether the additional stimulus checks could be targeted at those who need them the most, and also looking for the administration to justify the need for hundreds of billions allocated for other purposes, including $130 billion for schools, given that Congress has already spent some $4 trillion on the coronavirus relief effort, including $900 billion approved in December.
Legislation passed by the House would have the $1,400 stimulus checks phase out for individuals earning $75,000 or more a year, and families making $150,000 or more. But the phaseout level increases for families with more children, creating a situation where a family with multiple children making more than $300,000 a year could still see some benefit, even if they haven’t suffered income loss during the pandemic.
As we noted a few weeks ago, until a significant portion of our population receives a coronavirus vaccination, following “best practices” – like physical distancing, hand washing, and mask-wearing – remains the best way to protect ourselves and our loved ones.
We remain available to support you any way we can.
Keep the faith, be safe, and stay healthy.
PLEASE SEE important disclosure information at www.springwaterwealth.com/blog-disclosure/.